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Gomroon   sense   in 


Southern  Branch 
of  the 

University  of  California 

Los  Angeles 

Form  L-l 


This  book  is  DUE  on  last  date  stamped  oeiow 


M^y  2  s  1924 


*AYXtl 


JUN141966 


COMMON    SENSE    IN 
LABOR    MANAGEMENT 


COMMON  SENSE 

IN 

LABOR  MANAGEMENT 

By 
NEIL  M.   CLARK 


43115 

HARPER  &  BROTHERS  PUBLISHERS 

NEW   YORK  AND   LONDON 
MCMXIX 


Common  Sense  in  Labor  Management 


Copyright  1919.  by  Harper  &  Brothers 

Printed  in  the  United  States  of  America 

Published  September,  1919 


SLSO 


TO  MY  WIFE 


CONTENTS 

CHAP.  PAGE 

Foreword xi 

^.1.        The  new  thought  in  management    ....  1 

ik  ii.       how  far  can  industrial  democracy  go?  .     .  18 

III.  Working  conditions  and  industrial  unrest  44 

IV.  Living  conditions  and  industrial  unrest     .  68 

V.  The  money  incentive 90 

VI.  The  worker's  security  in  the  job  ....  114 
V\  VII.    Can    workers    be    craftsmen    instead    of 

MACHINES? 128 

VIII.  What  makes  a  good  suggestion  system?     .  148 

IX.  The  employer  and  the  union 162 

X.  The  fallacy  of  panaceas 174 

J  Appendix  I: 

>[  The    International    Harvester    Company's 

o^                  industrial  council  plan 191 

Appendix  II: 

The  wage  policy  of  the  Oneida  Community, 

Ltd 209 

Bibliography 213 


FOREWORD 

In  this  book  I  have  tried  to  bring  into  clear 
definition  the  more  important .  relations  between 
employers  and  employees,  with  an  appraisement 
of  methods  proved  successful  in  harmonizing  them. 
My  function  has  been  that  of  a  reporter,  in  large 
part,  for  the  ideals  and  policies  expressed  herein 
are  not  impractical  ideals  or  policies  of  mere 
theory.  I  have  gone  to  experienced  managers 
for  them.  My  task  has  been  one  of  selection  and 
formulation.  Hence,  my  debts  to  broad-thinking 
business  men  from  coast  to  coast  are  so  numerous 
that  I  should  be  unfair  to  all  if  I  singled  out  any 
for  special  mention.  I  must  not  fail,  however,  to 
record  my  deep  satisfaction  and  gratefulness  for 
the  opportunities  afforded  through  my  association 
with  the  A.  W.  Shaw  Company,  for  the  preparation 
of  this  book. 

Chicago,  1919. 


COMMON    SENSE    IN 
LABOR    MANAGEMENT 


COMMON  SENSE   IN 
LABOR   MANAGEMENT 


THE  NEW  THOUGHT  IN  MANAGEMENT 

Need  for  giving  human  factor  expert  attention — Old  attitude 
in  management  was :  1.  Labor  is  a  commodity;  2.  "I'm 
going  to  run  my  own  business" — This  attitude  largely 
responsible  for  unions  and  conflicts — Elements  of  a  good 
wage  contract  were  formerly  absent — Where  unions  are 
strongest  these  elements  are  still  lacking — Conflict 
between  employers  and  employed  may  be  avoided — 
— Abuses  of  piece  rates — Labor  is  a  commodity,  but 
not  so  laborers — Increase  in  size  of  industrial  units 
helped  class  divisions — Experts  not  commonly  employed 
to  handle  human  factor — The  evil  of  uniform  wage 
increases — Who  is  the  real  boss  in  business? — Dominant 
interests  must  control — Functions  that  employers  and 
employed  must  share — Duty  to  inspire  confidence  of 
workers  in  employers — Further  duty  to  give  them 
entirely  fair  share  in  the  rewards  and  satisfactions  of 
business. 

TTAVEN'T  most  of  us,  in  the  past,  been 
A  A  evading  the  real  facts  in  what  we  com- 
monly call  the  "labor  problem"?  Haven't 
we  tried  to  get  by  with  compromises?  Haven't 

[i] 


COMMON  SENSE   IN  LABOR  MANAGEMENT 

we  avoided  searching  for  fundamentals  and 
satisfied  ourselves  with  temporizing?  I  be- 
lieve that  we  have;  and  I  believe  that  now 
we  have  reached  a  pass  when  we  cannot  do 
so  any  longer. 

What  is  the  "labor  problem"?  What  is 
its  relation  to  business  as  a  whole? 

Briefly,  the  trinity  of  business  is  money, 
men,  and  customers.  Money  is  the  bank- 
account,  and  all  the  facilities  of  plant,  equip- 
ment, materials,  merchandise,  tools,  and 
supplies.  Men  are  those  who  carry  on  the 
business,  including  the  managers  who  conceive 
policies,  make  plans  and  direct  them,  and 
those  who  execute  the  plans.  Customers  are 
those  who  buy  the  product  or  the  merchandise. 
The  job  of  management  is  to  organize,  co- 
ordinate, and  direct  the  operations  of  these 
three  elements.  In  the  past  there  have  been 
instances  of  great  and  successful  concerns 
built  by  men  who  were  mere  financial  experts 
or  mere  clever  sales  organizers.  But  we  may 
well  doubt  whether  in  the  future  any  great 
business  success  can  be  achieved  in  which 
serious  and  expert  attention  is  not  also  paid 
to  the  best  interests  of  all  persons  in  the 
business.  That — the  best  interests  of  all  in 
the  business — is  the  labor  problem.  Con- 
ceivably, obstinate  and  continued  disregard 

[2] 


THE  NEW  THOUGHT  IN  MANAGEMENT 

of  it  on  a  large  scale  might  endanger  the  very 
life  of  the  present  industrial  structure. 

It  is  useless  to  blind  ourselves  to  the  fact  that 
attempts  have  been  made,  and  are  being  made 
with  more  or  less  success,  to  do  away  with  busi- 
ness conducted  on  the  basis  of  private  profit. 
There  are  arguments  against  that  plan.  It 
is  not  my  purpose  to  present  them.  I  assume, 
as  the  business  man  whom  you  and  I  meet 
daily  on  the  street  does  assume,  that  the 
inducements  to  effort  and  initiative  are  or- 
dinarily greater  under  the  present  scheme  than 
under  any  other  yet  proposed.  But  that 
does  not  hinder  us  from  admitting  that  we 
can  probably  find  ways  to  improve. 

Radical  changes  may  indeed  already  be  ob- 
served in  the  attitude  of  managers  who  are 
keeping  in  step  with  the  times.  We  are  all 
familiar  with  the  old  attitude.  I  call  it  "old" 
merely  for  convenience,  for  there  have  always 
been  managers  far  in  advance  of  current 
practices,  just  as  there  are  always  many  who 
are  sadly  behind  the  times.  The  old  attitude, 
I  believe,  is  perhaps  best  typified  by  the 
manager  who  was  content  to  assert  that: 

1.  Labor  is  a  commodity,  to  be  bought  like 
steel  and  crude  rubber;    and, 

2.  "I  am  boss  and  I  am  going  to  run  my 
business." 

13] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

In  times  like  the  present  we  are  inclined  to 
question  all  " truths."  Is  it,  then,  a  fact  that 
labor  is  a  commodity?  And  if  so,  does  it 
resemble  steel  and  crude  rubber?  Is  the  boss 
really  boss?  These  are  not  flippant  questions. 
Rightly  answered,  they  may  help  us  to  come 
close  to  the  heart  of  the  pressing  problems 
of  industrial  unrest  in  this  country. 

I  think  I  am  not  far  wrong  in  saying  that 
the  old,  arbitrary,  autocratic  attitude  of 
management  had  much  to  do  with  the  creation 
of  unions.  Many  an  employer  is  convinced 
that  unions  are  an  industrial  disease  and 
should  be  eradicated.  Perhaps  he  is  right. 
Yet  surely  he  should  not  for  that  reason  refuse 
to  recognize  conditions  that  brought  them  into 
being  and  fostered  their  existence.  Causes, 
when  they  are  located,  may  suggest  remedies. 

Wages,  in  point  of  time,  formed  the  first 
cause  of  conflict  arising  from  the  labor- 
commodity  theory.  After  industries  increased 
greatly  in  size,  and  before  the  unions  came 
into  being,  the  elements  of  a  good  wage  con- 
tract were  lacking  on  the  side  of  the  employees. 
In  those  days  the  employer  in  need  of  help 
merely  stated  the  wages  he  would  pay. 

"I'll  give  you  two  dollars  a  day,"  he  told 
the  applicant  for  a  job. 

"I  want  two  seventy -five." 

[4] 


THE  NEW  THOUCxHT  IN  MANAGEMENT 

"Two  dollars!"  persisted  the  employer. 

"But  I  can't  live  on  two  dollars." 

"That's  what  I  pay." 

The  applicant  had  to  think  of  the  unpaid 
rent,  of  his  wife  and  family  waiting  at  home 
for  food,  and  of  his  long,  unsuccessful  tramp 
in  search  of  work,  and  he  was  often  virtually 
forced  to  agree.  "Take  it  or  leave  it,"  was 
in  effect  the  employer's  ultimatum.  The  em- 
ployer had  the  whip  and  used  it.  Carlton  H. 
Parker  gave  a  characteristic  example  of  the 
operation  of  wage  contracts  between  an  em- 
ployer and  unorganized  workers  in  one  of  his 
descriptions  of  the  Wheatland  Riot.  Speak- 
ing of  the  Durst  hop-ranch  he  said: 

An  examination  of  the  wage  system  of  this  ranch 
for  both  the  seasons  of  1912  and  1913  showed  an  in- 
teresting phenomenon.  Each  day  there  existed  four 
possible  wage  rates.  If  many  hop-pickers  had  drifted 
in  by  wagon  and  train  and  foot  during  the  previous 
day,  and  as  a  result  an  unemployed  crowd  hung  about 
the  check-window  at  sunrise,  then  ninety  cents  per 
hundred  pounds  was  hung  up  as  the  piece  price  for  hop- 
picking.  If  there  were  unemployed  still  desirous  for 
work  even  after  this  wage  announcement,  and  a  sur- 
plus hung  about  the  window  the  following  morning, 
it  was  the  custom  to  lower  the  wages  to  eighty-five 
cents  per  hundred  pounds.  Like  the  immigrant  at 
Ellis  Island,  the  hop-picker  arrives  at  the  job  without 
a  money  reserve.  The  dictator  of  the  wage  policy 
of  this  ranch  explained  that  if  the  pickers  grew  dis- 

2  [5] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

gruntled  at  either  the  rate  of  pay  or  the  average  income 
and  drifted  away,  leaving  work-checks  uncalled  for, 
then  the  wage  scale  would  be  raised  to  ninety -five  cents 
or  even  a  dollar.  There  had  been  certain  days  in  the 
past,  he  said,  when  a  labor  exodus  had  forced  the  price 
to  as  high  as  one  dollar  and  ten  cents  before  the  work- 
ers would  flow  in  and  allow  the  rate  to  sink  to  a  more 
profitable  level.1    * 

The  unions  undertook  to  put  workers  on  a 
better  bargaining  basis.  And  where  they  have 
become  strongest,  the  elements  of  a  good  wage 
contract  are  often  lacking  still,  but  on  the 
side  of  capital.  The  picture  of  what  happens 
in  a  later  day  is  significant.  The  employer, 
sitting  in  his  front  office,  is  perhaps  unaware 
that  the  men  have  grumbled  among  them- 
selves. He  has  a  big  contract  calling  for 
early  shipment.  The  union  leaders  know  all 
about  it  and  figure  that  their  time  has  come. 
Their  representative  presents  the  demands. 

"You  can  go  to — "  starts  the  employer; 
then  he  remembers  the  big  order. 

"Yes?" 

"Why,  this  proposition  is  preposterous. 
Go  back  and  tell  the  men  I'll  think  it  over." 

"We  can  hardly  wait.  I'll  have  to  take  a 
definite  answer  back  now — yes  or  no." 

"And  if  it's  no?" 

1  "The  California  Casual  and  His  Revolt."     By  C.  H.  Parker. 
Quarterly  Journal  of  Economics,  November,  1915. 

[6] 


THE  NEW  THOUGHT  IN  MANAGEMENT 

"The  men  will  walk  out  at  once." 

If  the  employer  is  pugnacious  he  perhaps 
tells  them  to  walk  out:  "Walk  out  and  stay 
out!  And  if  they  ever  come  back  here  and 
want  jobs,  they  can  yelp  at  the  door  and 
starve  first!" 

But  when  the  men  walk  out,  the  wheels  in 
the  plant  stop  turning.  A  "strike-breaker," 
hastily  called,  may  import  a  bunch  of  huskies 
who  wreck  the  machines.  The  order  does  not 
get  out.  And  it  may  be,  if  the  men  show 
they  can  last  longer  than  the  employer,  that 
the  latter  angrily  yields.  If  he  does,  it  is  no 
more  a  good  contract  than  when  he  had  the 
whip  and  fixed  the  wage  rate  at  his  con- 
venience or  by  some  rule-of -thumb  measure 
of  supply  and  demand.  In  other  words,  what 
we  see  here  is  simply  war — with  employers 
in  one  camp  and  employees  in  the  other. 
And  the  victor  gets  the  spoils. 

These  pictures  are  suggestive  of  the  old 
and  far  too  common  managerial  attitude. 
But  that  such  warfare  is  not  necessarily  in- 
herent in  our  present  industrial  scheme  is  a 
conviction  that  is  daily  gaining  ground  among 
enlightened  employers.  It  is  more  than  a  con- 
viction, in  fact,  in  many  concerns.  With 
them  industrial  harmony  is  a  fact.  Later  I 
shall  endeavor  to  support  this  with  the  meth- 

[7] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

ods  and  results  of  some  of  these  strikingly 
successful  concerns.  The  wastefulness  of  mere 
conflict  is  self-evident. 

Here  it  may  be  well  to  point  out  a  common 
laxness  in  the  use  of  terms.  It  is  important 
to  recognize  that  capital,  correctly  defined, 
is  what  I  have  called  money — that  is,  the 
material  side  of  industry,  the  machines  and 
supplies  and  raw  products.  Frederic  C.  Hood, 
of  the  Hood  Rubber  Company,  clearly  drew 
the  distinction  and  pointed  the  real  problem 
in  an  address  before  the  Harvard  Teachers' 
Association. 

"These  two  words,  'capital'  and  'labor,' 
are  incorrectly  and  carelessly  used  to  refer 
to  capitalists  and  laborers.  As  there  are  very 
few  capitalists  who  do  not  labor,  and  very 
few  laborers  who  are  not  capitalists,  and  as, 
therefore,  most  capitalists  are  laborers,  and 
most  laborers  are  capitalists,  they  are  one 
and  the  same  thing  as  a  class.  So-called 
'  capital  and  labor '  problems  are  not  the  prob- 
lems of  industry  at  all.  The  great  problem 
is  management,  the  organization  of  manage- 
ment, the  selection  of  the  right  personnel  for 
management,  and  the  teaching  of  self -manage- 
ment." 

Other  abuses  than  those  cited  have  crept 
into  industry,  due  to  the  old  attitude  of  man- 

[81 


THE  NEW  THOUGHT  IN  MANAGEMENT 

agers,  none  perhaps  more  obviously  irrational 
than  the  abuse  of  piece  rates.  The  employer 
who  wanted  greater  output  turned  to  piece 
rates  as  a  handy  incentive.  Typically,  his 
method  was  to  call  in  his  cost  clerks  and  the 
superintendent,  and  together  they  set  a  rate 
that  they  considered  fair.  It  was  often,  at 
best,  a  hasty,  makeshift  method. 

Piece  rates  proved  an  effective  stimulus  to 
increased  production  at  first.  Men  drew  on 
unsuspected  reserves  of  energy,  and  perhaps 
in  a  short  time  some  of  them  were  earning 
twelve  and  fifteen  dollars  a  day.  Now,  it 
was  typical  of  the  old  attitude  in  management 
to  consider  that  a  man  who  works  with  his 
hands  cannot  possibly  be  worth  one  hundred 
dollars  a  week,  or  anything  approaching  it. 
Regardless  of  the  fact  that  the  unit  cost  to 
the  employer  on  the  piece  basis  was  no  greater, 
was,  indeed,  perhaps  less,  than  under  the 
straight  wage  plan,  the  employer  somehow 
felt,  perhaps  naturally,  that  he  had  been 
tricked  by  the  men  into  setting  a  rate  that  he 
considered  unfair  to  himself.  He  felt  that 
they  had  previously  been  "holding  out"  on 
him.  And  he  desired  to  retaliate.  He  knew, 
however,  that  a  reduction  in  the  rate  would 
discourage  his  men.  Perhaps  he  made  an 
attempt,  nevertheless,  to  introduce  a  lower 

[9] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

rate.  And  when  he  did  the  inevitable  result 
was  an  immediate  fall  in  production,  a  rise 
in  the  unit  cost,  and  fuel  was  added  to  the 
flame  of  the  workers'  discontent. 

One  instance  has  come  to  my  attention  of 
an  employer  who  set  piece  rates  in  his  foundry 
unwisely;  and  when  he  saw  the  results  he 
trumped  up  an  excuse  and  closed  the  foundry. 
Thirty  men  were  out  of  jobs.  Presently  the 
foundry  opened  again,  but  not  one  of  the  old 
men  was  taken  back.  A  new  complement  of 
workers  had  been  hired  at  a  new  piece  rate, 
which  allowed  them  by  hard  work  to  earn 
what  this  employer  was  satisfied  "a  man  who 
works  with  his  hands"  should  earn. 
/  When  management  errs  and  recoups  for  its 
errors  at  the  expense  of  the  men  it  is  scarce- 
ly strange  that  the  latter  have  taken  means, 
sometimes  warlike,  to  bring  home  the  fact 
that  they  are  not,  as  the  old  idea  in  manage- 
ment seemed  to  imply,  mere  commodities  to 
be  bought  like  steel  and  crude  rubber.  It  can 
be  granted  readily  enough  that  labor  in  our 
modern  organization  of  industry  is  a  com- 
modity. It  may  also  be  bought.  But  there 
the  resemblance  to  all  other  commodities  ends. 
For  labor  is  the  product  of  sentient  beings. 
It  is  a  commodity  with  a  kick.  It  has  an 
eye,  to  see  what  is  going  on;  an  ear,  to  observe 

r  101 


THE  NEW  THOUGHT  IN  MANAGEMENT 

the  sincerity  in  an  employer's  words;  a  voice, 
to  "call  his  bluff";  and  sensibility,  to  decide 
whether  he  is  a  hypocrite,  a  villain,  an  ass, 
or  a  gentleman.  Labor  is  a  commodity.  But 
you  cannot  separate  labor  from  the  human 
beings  who  produce  it.  And  those  human 
beings  are  not  commodities,  and  cannot  be 
bought  and  sold.  You  can  handle  iron  ore  by 
the  ton  or  the  hundreds  of  tons.  Sample  a  bit 
taken  from  a  car  and  you  have  the  formula  for  the 
lot.  But  the  multiplication-table  fails  to  work  on 
human  beings.  Multiply  one  typist  by  five  and 
you  have — not  merely  five  typists,  but  Sarah, 
Lizzie,  Hildah,  May,  and  Dorothy.  The  new 
attitude  in  management  recognizes  that. 

It  would  be  unfair  not  to  admit  that  the 
increasing  size  of  business  units  had  much  to 
do  with  the  decline  of  the  simple  righteousness 
that  used  to  correct  most  grievances  as  they 
arose.  The  employer  was  likely  to  be  right- 
eous so  long  as  he  knew  labor  as  "John"  and 
"Bill" — but  when  he  got  to  sitting  in  a  se- 
cluded front  office  where  the  hundreds  of 
"Johns"  and  "Bills"  who  later  worked  for 
him  never  came  he  looked  through  a  twisted 
glass.  "Labor  in  the  mass"  was  the  way  he 
came  to  think  of  the  individuals.  And  he 
counted  on  his  fingers  the  "commodities"; 
rubber,  steel,  labor. 

in] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

There  came  the  break.  "John"  and  "Bill" 
never  did  forget  that  they  were  individuals! 

Strangely  enough,  most  employers  neglected 
to  adopt  with  labor  an  expedient  that  they 
were  forced  to  adopt  in  handling  nearly  every 
other  part  of  their  business.  It  was  necessary, 
as  sales  increased,  to  intrust  sales  manage- 
ment to  experts;  as  advertising  increased  in 
volume,  advertising  experts  were  employed; 
as  purchases  grew,  the  job  of  buying  was 
turned  over  to  expert  purchasing  agents;  but 
as  the  number  of  workers  increased,  it  was  the 
exceptional  and  not  the  typical  concern  which 
employed  an  expert  to  direct  relations  with 
workers — relations  which  the  employer  had 
earlier  directed  himself,  just  as  he  once  per- 
sonally directed  sales,  advertising,  and  pur- 
chasing. It  is  characteristic  of  the  new  atti- 
tude of  management  to  recognize  that  these 
relations  must  be  in  the  hands  of  an  expert, 
either  the  employer  himself  or  some  one  else 
specially  qualified  for  this  delicate  task. 

As  the  unions  gained  strength  they  were 
able  to  introduce  the  scheme  of  uniform  wage 
increases.  The  employer,  like  Atalanta,  had 
to  throw  this  golden  apple  over  his  shoulder 
when  the  race  got  too  close.  In  abnormal 
times,  uniform  increases  are  not  always  un- 
desirable.   They  may,  for  instance,  offset  the 

[12] 


THE  NEW  THOUGHT  IN  MANAGEMENT 

increased  cost  of  living.  When  they  aim  at 
that  end  they  are  not  given  particularly  as 
rewards  of  merit. 

But  the  result  under  normal  conditions  is 
easy  to  visualize.  A  uniform  wage  increase, 
say,  is  granted  to  a  drill-press  gang.  Jack  and 
Jerry  work  side  by  side.  Jack,  who  has  placed 
his  development  of  the  art  of  loafing  before  his 
love  of  the  job,  really  has  been  earning  less 
than  his  wages.  Jerry  has  been  earning  more 
and  getting  the  same  as  Jack.  Jerry  has  a 
wife  and  two  babies,  perhaps.  He  started  in 
life  with  serious  purpose.  Ambitious,  he 
went  to  work  in  the  factory  with  the  thought 
that  possibly  some  day,  by  hard  work,  he 
might  become  a  foreman  or  even  the  super- 
intendent. He  studies  Jack,  naturally,  knows 
that  he  is  a  conscientious  loafer,  and  despises 
him. 

What  is  the  result  when  both  men  get  a 
10-per-cent.  increase  in  wages! 

Jack  gloats.  He  curls  up  his  biceps  and 
boasts,  "We  made  him  come  across!"  And 
back  in  his  head  is  the  thought,  "Just  wait 
a  bit — we'll  make  him  do  it  again!"  To  Jerry 
the  injustice  comes  home.  His  ambition  has 
sufficient  reason  to  lie  down  and  go  to  sleep. 

WTho  profits!  Surely  not  the  employer,  for 
Jack  despises  him  and  Jerry  resents  his  in- 

[13] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

justice.  Jerry  gets  only  what  is  due  him, 
or  perhaps  less.  Jack  gets  what  he  has 
not  earned,  and  pockets  it  with  a  vicious 
wink. 

A  wage  increase  is  logically  a  simple  instru- 
ment of  justice — the  machinery  by  means  of 
which  an  employee  who  earns  more  receives 
more.  But  the  uniform  wage  increase  dis- 
torts the  original  purpose,  becomes,  in  most 
cases,  an  instrument  of  injustice,  and  en- 
courages inefficiency. 

The  second  thesis  in  the  old  managerial 
attitude,  not  often  stated  in  precisely  these 
terms,  but  seldom  absent  from  the  employer's 
mind,  was,  "I'm  boss,  and  I'm  going  to  run 
my  business!" 

It  is  often  impossible  in  modern  industry, 
owing  to  the  intricate  interrelations  of  opera- 
tions and  departments,  to  determine  where 
the  credit  for  a  given  achievement  should  lie. 
It  is  the  result,  usually,  of  many  minds  and 
hands.  Some  of  the  workers  have  merely 
planned;  others  have  merely  executed  the 
plans.  The  final  result  is  reached  through  a 
process  of  continual  co-operation.  It  is  ob- 
viously unfair  to  give  all  credit  to  the  planner 
and  none  to  the  men  who  execute.  Both  per- 
form necessary  functions.  In  the  early  days 
of  most  businesses  it  is  usually  quite  easy  to 

[14] 


THE  NEW  THOUGHT  IN  MANAGEMENT 

locate  the  responsibility  for  progress,  for  usu- 
ally one  mind  or  a  very  few  minds  are  domi- 
nant. This  is  less  true  in  the  older  business 
which  has  acquired  the  momentum  of  rapid 
growth.  The  tendency  of  business-founders 
after  the  first  strenuous  years  is,  often,  to  let 
the  momentum  replace  their  own  efforts  to 
quite  an  extent.  When  that  happens  it  is 
ordinarily  difficult  to  decide  where  the  prime 
responsibilities  for  progress  lie,  for  others  than 
the  founders  provide  good  ideas  and  invent 
machines  and  processes.  The  boss  in  fact — 
the  man  actually  directing  and  doing — may 
not  be  the  boss  in  name. 

Another  angle  is  the  consideration  of  work- 
ing conditions.  Dominant  interests  must  in 
the  long  run  control,  in  industry  as  in  govern- 
ment. The  man  chiefly  interested  in  a  given 
condition  logically  must  control  it,  directly  or 
through  his  representative.  In  the  old  man- 
agerial attitude  the  employer  commonly  felt 
little  or  no  interest  in  the  dark  stairways, 
wet  basements,  and  dangerous  machines  where 
some  of  his  men  worked,  except  as  he  might  be 
called  on  for  compensation  under  the  law  if 
some  one  got  hurt.  The  new  attitude  is,  of 
course,  that  the  employer  has  a  direct  interest 
in  such  conditions,  for  the  workman's  health 
is  at  stake;  and  we  have  begun  to  realize  the 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

cost  to  industry  of  unhealthy  workers  and  a 
rapid  labor  turnover. 

Perhaps  in  wages,  therefore,  and  surely  in 
working  conditions  and  the  chances  for  pro- 
motion and  for  realizing  his  ambition  through 
his  work,  the  worker  has  an  equal  interest  with 
the  employer.  And  it  is  part  of  the  new 
managerial  attitude  to  recognize  the  worker's 
interest.  The  methods  of  making  this  recog- 
nition effective  vary  about  as  greatly  as  the 
individualities  of  managers. 

Under  the  compulsion  of  new  times  and  con- 
ditions, employers  perforce  take  a  new  point 
of  view.  If  their  point  of  view  lacks  fun- 
damental justice,  if  it  fails  to  create  in  the 
worker  a  feeling  of  confidence  as  regards  the 
righteousness  of  the  employer,  there  can  be 
no  answer  to  the  human  problem  in  business. 
But  there  are  daily  assurances  that  the  atti- 
tude is  becoming  constantly  more  just. 

Science  applied  to  the  study  of  man  at  work 
has  revealed  sources  of  energy  and  possibilities 
in  the  use  of  time  that  in  a  majority  of  in- 
stances have  hitherto  been  ignored.  It  is 
characteristic  of  the  new  attitude  in  manage- 
ment to  take  stock  of  these  energies  and  to 
develop  such  methods  that  each  man  may 
have,  not  only  the  opportunity,  but  also  the 
desire,  to  make  the  fullest  use  of  his  powers. 

[16] 


THE  NEW  THOUGHT  IN  MANAGEMENT 

There  is  a  spirit  abroad  that  the  true  aim  of 
business  is  service  to  society,  and  that  the 
rewards  of  business  enterprise  will  in  the  end 
be  proportionate  to  the  service  rendered.  And 
there  is  abroad  also  the  feeling  that  it  is  right 
and  necessary,  and  profitable,  to  see  that  the 
workers  have  a  more  equal  share  in  the  satis- 
faction of  serving  and  the  rewards  of  service. 


II 

HOW    FAR    CAN    INDUSTRIAL    DEMOCRACY    GO? 

The  Bourbon  and  the  democrat  in  politics;  in  industry — 
Difference  between  governmental  and  industrial  democ- 
racy— Workers  do  not  want  responsibility,  but  refuse 
to  be  pawns — Giving  a  voice  does  two  things:  1.  Stops 
progress  of  hidden  discontent;  2.  Uncovers  the  valuable 
ideas  of  workers — Varieties  of  methods  that  successful 
managers  use — Employees'  conference  plan  of  the  Proc- 
ter &  Gamble  Company — Putting  workers  on  the 
board  of  directors — The  General  Ice  Delivery  Com- 
pany's plan — Advantages  and  dangers — A  semi-monthly 
meeting  of  elected  representatives  with  the  president; 
The  Browning  Company's  plan — The  "house-and- 
senate"  plan — Difference  between  self-direction  and 
management — Practical  democracy  at  Filene's — Novel 
features  of  the  International  Harvester  Company's 
plan — The  substance  of  the  plan  less  important  than 
the  spirit  in  which  it  is  executed. 

^T^HE  Bourbon,  Louis  XIV,  arrogated  all  the 
functions  of  government  to  himself  and 
made  his  name  famous  and  feared  in  seven- 
teenth-century Europe  by  the  policy  which  he 
summed  up  in  the  phrase,  " L'etat,  c'est  moi" 
("I  am  the  state!").  More  than  two  centuries 
later  the  pronouncement  of  Woodrow  Wilson 
in  a  fundamentally  different  type  of  govern- 
ment was,  "The  whole  purpose  of  democracy  is 

[18] 


HOW  FAR  CAN  INDUSTRIAL  DEMOCRACY  GO? 

that  we  may  hold  counsel  with  one  another,  so  as 
not  to  depend  upon  the  understanding  of  one 
man,  but  to  depend  upon  the  counsel  of  all."  I 
We  have  had  the  Bourbon  in  industry. 
Typically,  he  was  the  man  who  said,  "I'm 
boss,  and  I'm  going  to  run  my  business." 
But  it  is  evident  that  industry  is  coming  to 
accept  as  essential  to  its  well-being  some  of 
the  principles  of  governmental  democracy. 
Management  in  industry,  hitherto,  has  com- 
monly been  the  agent  solely  of  the  owners  of 
capital.  But  the  most  successful  managers  to- 
day are  giving  closer  attention  to  the  voices 
of  those  workers  who  have  no  share  in  the 
ownership  of  the  capital  invested  in  the  busi- 
ness. This  is  done  to  the  end  that  they  may 
not  have  to  "depend  upon  the  understanding 
of  one  man,  but  to  depend  upon  the  counsel 
of  all."  At  the  same  time,  it  may  as  well  be 
confessed  frankly  that  there  is  much  talk  of  the 
democratic  control  of  industry  without  careful 
definition  of  the  real  meanings  implied  in  the 
phrase,  and  with  only  a  superficial  understand- 
ing of  the  steps  that  may  best  be  taken  to 
provide  for  the  kind  of  democracy  in  industry 
that  will  prove  most  profitable  and  practical 
all  around. 

1  The  New  Freedom,  by  Woodrow  Wilson.     Doubleday,  Page  & 
Co.,  p.  105. 

[191 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

What  we  need  are  clear  definitions  of  terms. 

Although  industries  and  governmental  de- 
mocracies are  alike  in  being  collections  of  in- 
dividuals, it  must  be  recognized  that  they 
differ  radically  in  their  premises  and  purposes. 
A  democratic  form  of  government  is  the 
machinery  which  human  beings  set  up  to  pro- 
tect their  inalienable  rights  as  individuals 
in  a  social  environment.  An  industry  is  the 
machinery  designed  to  make,  distribute,  or 
facilitate  the  use  of  articles  having  economic 
value.  In  a  democracy  it  is  written  into  the 
preliminary  agreement,  the  constitution,  that 
every  citizen  shall  have  an  equal  voice,  ex- 
ercised through  the  vote,  in  the  management 
of  the  government  and  even  in  changing  its 
fundamental  character  if  that  proves  desir- 
able. In  an  industry  it  is  not  commonly  a 
condition  of  the  understanding  between  em- 
ployer and  employee  that  the  latter  shall  have 
a  vote  equal  in  weight  with  that  of  the  em- 
ployer, or  anything  like  it.  Such  an  industrial 
organization  might  be  built.  Attempts  to  do 
so  have  been  made,  with  more  or  less  success. 
But  in  the  typical  case  the  employee  brings 
as  his  contribution  to  an  organization  already 
going — an  organization  which  he  may  enter 
or  not,  as  he  chooses — a  skill  or  intelligence 
for  which  the  employer  is  willing  to  pay. 

'    [20] 


HOW  FAR  CAN  INDUSTRIAL  DEMOCRACY  GO? 

The  employer  is  supposed  to  contribute  ca- 
pable leadership. 

Assuming  for  the  moment  that  the  contract 
relating  to  payment  is  made  with  nice  justice 
to  both  parties,  there  yet  remains  a  host  of 
other  questions  bearing  on  the  relations  be- 
tween the  employer  and  employee,  on  which 
the  employer  by  himself  is  not  always  best 
qualified  to  bring  to  bear  the  wisest  intelli- 
gence; on  which,  in  other  words,  it  is  decidedly 
advantageous  to  the  business  and  to  all  con- 
cerned in  it  for  the  employer  and  employee 
to  "hold  counsel  with  one  another." 

In  that  sense,  then,  there  is  an  analogy  be- 
tween a  government  that  is  a  democracy  and 
an  industry.  But  the  term,  "industrial  de- 
mocracy," lightly  used  without  a  definition 
of  terms  or  an  understanding  of  what  is  really 
involved,  may  readily  lead  to  all  sorts  of 
erroneous  conclusions,  however  well-inten- 
tioned. 

It  is  doubtful  whether  most  workers  want 
to  assume  the  responsibilities  of  management. 
Lord  Salisbury  on  one  occasion  said  that 
people  do  not  want  district  councils,  but 
circuses.  In  the  main,  they  want  the  chance 
to  achieve  simple  happiness  in  the  job  and  out 
of  it,  the  chance  to  live  their  lives  agreeably. 
And  that  chance  they  cannot  have  if  natural 

3  [21] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

and  required  means  of  self-expression  are  de- 
nied to  them,  if  their  work  is  repugnant,  if 
the  management,  their  associates,  and  working 
conditions  are  such  that  they  cannot  retain 
their  self-respect,  or  if  the  rewards  of  their 
work  are  insufficient  to  provide  fairly  the 
needs  of  life  for  themselves  and  their  families. 
To  the  end  that  they  may  assure  themselves 
a  greater  share  of  chances  for  happiness,  work- 
ers are  feeling  the  need  of  having  a  voice  that 
can  be  heard  in  the  counsels  of  management. 
To  the  end  of  better  business  relations  with 
workers  and  greater  efficiency  in  work,  em- 
ployers are  providing  ways  for  them  to  have 
such  a  voice.  While  the  typical  worker  does 
not  want  responsibility,  he  does  deeply  resent 
the  feeling  that  he  is  a  mere  pawn  to  be  shifted 
about  at  the  employer's  pleasure,  without  the 
means  of  expressing  the  direction  of  his  thought 
on  those  policies  of  management  which  vitally 
affect  his  well-being.  The  strike  is  a  method  of 
expressing  disapproval  when  conditions  become 
acute.  But  it  is  costly  and  precipitates  war- 
fare, and  ends  by  being  satisfactory  neither 
to  the  employer  nor  to  the  employee. 

The  provision  of  a  means  whereby  workers 
may  be  heard  by  management  has  two  sides 
to  it.  One  is  merely  negative,  and  the  other 
is  positive  or  constructive. 

[221 


HOW  FAR  CAN  INDUSTRIAL  DEMOCRACY  GO? 

The  negative  side  is  that  getting  men  to 
express  themselves,  or  making  it  perfectly 
clear  that  it  is  the  desire  of  the  management 
that  they  do  express  themselves,  and  that 
what  they  have  to  say  will  be  given  fair  and 
due  consideration  by  men  of  sufficient  au- 
thority to  make  adjustments,  tends  to  pre- 
vent brooding  over  seeming  injustice,  with 
all  the  evil  consequences  thereof.  Fires  that 
start  in  the  underbrush  where  no  human  eye 
can  see  them  are  often  most  dangerous.  They 
have  a  chance  to  gather  headway  before  dis- 
covery. Getting  men  to  tell  about  the  little 
matters  in  the  conduct  of  management  that 
annoy  them  and  make  them  unhappy,  before 
these  have  a  chance  to  grow  into  dangerous 
industrial  fires,  is  a  difficult  and  delicate  art, 
but  vitally  important.1 

1  An  indication  of  the  nature  of  the  grievances  against  management 
that  workers  may  store  up  in  their  minds  is  found  in  the  Report  of 
the  President's  Mediation  Commission  (Government  Printing  Office, 
1918).  Speaking  of  the  operation  of  a  newly  established  grievance 
committee  in  the  Arizona  copper  regions,  the  Report  says:  "In  one 
district  250  grievances  were  disposed  of  in  five  weeks.  Many  of 
the  grievances  were  found  to  be  trivial  or  groundless;  they  were,  how- 
ever, the  surviving  surface  manifestations  of  the  old  unhealthy 
relationship.  The  prompt  disposition  of  such  grievances  prevented 
that  balked  sense  of  justice  on  the  part  of  men  which  so  often  leads 
to  the  explosion  of  a  strike.  Instead  of  a  policy  of  drift,  with  inter- 
mittent eruptions,  there  is  now  the  continuous  administration  of 
industrial  machinery,  which  serves  as  a  bulwark  for  stability.  Con- 
ditions are  by  no  means  fully  normal;  old  feelings  and  old  bitternesses 
still  smolder,  but  new  habits  and  new  hopes  of  co-operation  between 
management  and  men  are  steadily  being  built." 

[23] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

The  positive  side  is  that  workers,  if  only 
by  their  complaints,  may  reveal  constructive 
steps  that  can  be  undertaken  with  profit. 
Men — even  common  workers — are  not  mere 
muscle.  They  cannot  help  but  have  ideas 
about  their  activities  and  experiences.  How- 
ever crude  and  incorrect  the  ideas  may  be, 
they  yet  often  contain  the  kernel  of  valuable 
constructive  plans.  It  may  be  made  in  the 
interest  of  all  that  these  ideas  shall  be  de- 
veloped. 

Perhaps  it  is  most  immediately  necessary 
to  give  thought  to  the  first  of  these  consider- 
ations— the  mere  provision  of  an  adequate 
means  of  letting  the  men  get  the  willing  ear 
of  management  with  the  tale  of  their  griev- 
ances. For  the  fact  must  be  faced  that  in 
many  instances  this  simple  privilege  has  been 
denied.  In  the  last  analysis  that  very  fact 
can  probably  be  found  at  the  root  of  some 
serious  industrial  conflicts.  Let  it  be  borne 
in  mind,  however,  that  the  business  may 
profit  greatly  if  the  management  encourages 
intelligently,  and  considers  justly,  those  ideas 
of  the  men  which  have  intrinsic  value.  This 
will  be  dealt  with  at  greater  length  in  a  later 
chapter. 

Granted  that  it  is  important  to  provide  the 
channels  and  to  encourage  the  habit  of  inter- 

[24] 


HOW  FAR  CAN  INDUSTRIAL  DEMOCRACY  GO? 

change  of  ideas  between  management  and  men, 
what  are  the  methods  of  doing  it? 

Naturally,  there  is  no  one  best  method.  In 
fact,  there  are  about  as  many  methods  as 
there  are  managers.  Some  managers  consti- 
tutionally prefer  the  safeguard  of  machinery 
which  provides  in  advance  for  every  con- 
ceivable contingency;  others  symbolize  their 
desire  to  receive  the  ideas  of  employees  by 
nothing  more  elaborate  than  the  open  office 
door.  The  size  of  the  concern,  and  its  char- 
acter, naturally  have  a  bearing  on  the  method 
used.  Let  us  examine  a  few  plans  that  have 
worked  in  various  concerns. 

The  Procter  &  Gamble  Company  has  an 
Employees'  Conference,  with  a  constitution 
and  by-laws.  I  quote  the  following  from  a 
company  booklet: 

The  purpose  of  the  plan  is  to  provide  for  regular 
conferences  between  representatives  of  the  employees 
and  representatives  of  the  management,  in  order  to 
afford  to  the  employees  ready  means  of  making  sug- 
gestions and  of  bringing  to  the  direct  attention  of  the 
management  matters  which,  in  their  opinion,  need  ad- 
justment or  correction,  as  well  as  to  give  to  the  manage- 
ment opportunity  to  outline  its  views  and  plans  to 
the  workmen,  to  the  end  that  both  may  benefit  and 
that  a  fuller  understanding  between  them  shall  exist. 

It  is  provided  in  the  constitution  that  the 
committee  shall  be  composed  of  elected  repre- 

[251 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

sentatives  of  the  employees,  each  of  whom 
must  qualify  as  one  "who  is  an  American 
citizen,  or  has  filed  his  first  application  for 
citizenship,  and  who  has  been  in  the  employ 
of  the  company  continuously  for  one  year  just 
prior  to  the  election."  Departments  having 
fifty  or  less  employees  elect  one  representa- 
tive for  each  fifty.  All  permanent  employees 
of  the  operating  department  who  have  been 
in  the  company's  employ  for  sixty  days  just 
prior  to  the  election  are  eligible  to  vote.  The 
committee  elects  its  own  chairman,  vice-chair- 
man, and  secretary  to  serve  one  year,  and 
meetings  are  required  to  be  held  at  least 
once  a  month,  ordinarily  between  the  hours 
of  six  and  nine  on  the  evening  of  the 
first  Monday  of  the  month;  and,  "in  order 
to  promote  friendly  relationship  among 
all  those  who  attend  the  meetings,"  it  is 
arranged,  whenever  possible,  to  serve  supper 
to  those  present  at  the  regular  meetings. 
The  business  meeting  is  held  immediately 
after  supper. 

The  management  is  represented  at  the  meet- 
ings of  the  committee  by  representatives  se- 
lected from  time  to  time  by  the  president  or 
general  manager  of  the  company.  A  further 
quotation  from  the  constitution  will  indicate 
the  method  of  operation: 

[26] 


HOW  FAR  CAN  INDUSTRIAL  DEMOCRACY  GO? 

Any  representative  may  present  for  discussion  and 
vote  any  matter  or  matters  affecting  the  general  wel- 
fare of  the  employees  in  their  relationship  to  the 
Procter  &  Gamble  Company.  .  .  .  \ 

Any  recommendation  of  the  committee,  which  has 
been  approved  by  the  affirmative  vote  of  three-fourths 
of  all  the  members  of  the  committee  present  at  the 
meeting  when  the  recommendation  is  voted  upon, 
and  which  has  been  concurred  in  by  the  representa- 
tives of  the  management  present  at  the  meeting,  shall 
be  considered  as  final. 

Any  recommendation  which  has  been  approved  by 
the  affirmative  vote  of  three-fourths  of  all  the  members 
of  the  committee  present,  but  which  has  not  been 
concurred  in  by  the  representatives  of  the  management 
present  at  the  meeting,  shall  be  brought  up  for  further 
discussion  at  a  special  meeting  to  be  held  two  weeks 
later.  If  it  is  not,  at  this  meeting,  approved  and  af- 
firmed, as  provided  in  the  preceding  paragraph,  it  shall 
then  be  referred  to  the  board  of  directors  of  the  com- 
pany for  decision. 

Any  recommendation  or  proposed  action  which  has 
been  defeated  by  failing  to  receive  such  affirmative 
vote  of  three-fourths  of  all  of  the  members  of  the 
committee  present  shall  not  be  brought  up  for  action 
again  within  three  months,  except  by  the  unanimous 
vote  of  all  members  present  at  any  regular  meeting  of 
the  committee,  during  that  period. 

The  aim  is  to  make  these  committees — there 
is  one  in  each  of  the  company's  three  main 
plants — really  responsible  bodies.  I  shall  cite 
but  one  instance  of  a  recommendation  made 

[27] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

by  a  committee  and  accepted  by  the  company. 
The  question  was  the  change  in  wage  scales 
incident  to  going  from  a  ten-hour  day  to  an 
eight-hour  day.  The  report  provided  for  ten 
hours'  pay  for  eight  hours'  work,  increases  in 
most  scales,  although  the  lowest  paid  positions 
received  the  highest  percentage  of  increases, 
and  it  set  a  minimum  wage  for  competent, 
adult  male  labor  of  fifty  cents  an  hour.  The 
company  found  this  a  fair  arrangement. 

The  general  plan  seems  to  be  working  satis- 
factorily in  so  far,  at  least,  as  the  committees 
themselves  are  concerned.  The  members  are 
gaining  an  understanding  of  the  difficulties 
and  point  of  view  of  the  management,  and  the 
management,  in  turn,  is  learning  something 
more  of  the  point  of  view  of  the  employees. 

This  result  alone  naturally  will  not  justify 
fully  this  or  any  other  similar  plan.  The  real 
end  to  be  achieved  is  to  breed  also  in  the  minds 
of  the  rank  and  file  of  the  workers,  as  well  as 
in  their  elected  representatives,  a  feeling  of 
complete  confidence  in  the  intention  of  the 
management  to  be  just.  That  feeling  is  won 
or  lost  in  large  measure  by  the  daily  little  acts 
and  contacts  of  the  management  and  the 
workers.  The  conference  plan  at  least  has 
the  merit  of  recognizing  and  providing  for  the 
thing  of  main  importance — that  is,  the  need  for 

[28] 


HOW  FAR  CAN  INDUSTRIAL  DEMOCRACY  GO? 

giving  employees  a  means  of  expressing  them- 
selves on  the  policies  of  management  that  vi- 
tally affect  them.  It  does  not  remove  the  final 
decision  from  the  place  where  it  naturally  be- 
longs, namely,  in  the  hands  of  the  management. 

The  Procter  &  Gamble  Company  has  taken 
an  even  further  step  in  a  similar  direction.  It 
has  been  decided  to  give  the  employees  an 
opportunity  to  select,  through  their  conference 
committees,  one  from  each  of  the  three  main 
plants,  representatives  whom  the  management 
will  recommend  to  the  stockholders  for  election 
to  the  board  of  directors.  The  idea  is  that 
this  will  be  an  added  bond  between  the  workers 
and  the  management. 

The  General  Ice  Delivery  Company,  of 
Detroit,  has  carried  this  idea  to  the  extent 
that  the  stockholders  ,  have  actually  placed 
workers  in  majority  control  on  the  board  of 
directors.1  It  must  be  pointed  out,  however, 
that  a  plan  of  this  sort  is  in  fact  merely  the 
substitution  of  one  kind  of  management  for 
another.    The  new  management — the  worker- 

1  Legal  status  has  been  granted  In  Massachusetts  to  employee- 
elected  members  of  the  boards  of  directors.  Senate  bill  No.  378  of 
that  state  reads  in  part:  "A  manufacturing  corporation  may  provide 
by  by-law  for  the  nomination  and  election  by  its  employees  of  one 
or  more  of  them  to  be  members  of  its  board  of  directors. ...  A  director 
elected  by  the  employees  shall  have  the  same  rights  and  powers  and 
shall  be  subject  to  the  same  duties  and  responsibilities  as  a  director 
elected  by  the  stockholders." 

[291 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

controlled  board  of  directors — still  has  the 
problem  of  relations  between  itself  and  other 
workers.  However  desirable  the  plan  may 
prove  under  certain  circumstances,  it  must 
always  be  borne  in  mind  that  there  is  danger 
lest  the  worker  selected  from  the  ranks  to 
serve  on  the  board  of  directors  will  change  his 
point  of  view  subtly  and  perhaps  unconscious- 
ly. He  may  absorb  the  ideas  of  the  dominant 
men  with  whom  he  is  chosen  to  associate,  to 
the  extent  that  he  no  longer  truly  represents 
the  workers  in  the  sense  that  he  knows  their 
thoughts  and  their  thoughts  only.  Of  course, 
if  he  can  carry  back  his  new  point  of  view  to 
his  fellow-wwkers,  and  thereby  is  able  to  win 
their  confidence  in  the  just  intentions  of  the 
management,  his  function  is  valuable,  and  he 
serves  the  best  interest  of  both  the  manage- 
ment and  the  men. 

A  less  formal  plan  than  that  of  the  Procter 
&  Gamble  Company  is  in  operation  in  the 
Browning  Company.1  Mr.  Sheldon  Cary, 
president  of  the  company,  twice  a  month  meets 
informally  elected  representatives  of  the  em- 
ployees. There  are  two  representatives  from 
each  department  of  the  shop — one  from  the 
day  force  and  one  from  the  night  force.     A 

1  See  his  article,  "How  My  Men  Help  Me  Manage,"  in  Factory, 
May,  1919,  for  full  details  of  the  plan. 

[30] 


HOW  FAR  CAN  INDUSTRIAL  DEMOCRACY  GO? 

department  may  send  the  same  or  a  different 
man  every  time. 

"I  preside  at  these  meetings  whenever  I  am 
in  town,"  says  Mr.  Cary,  "and  it  has  to  be 
mighty  important  business  outside  the  city 
to  prevent  my  attendance.  They  are  called 
at  two  o'clock  and  last  until  business  is  fin- 
ished. The  superintendent  sits  in,  but  no 
foremen  are  present. 

"...  The  meetings  are  entirely  informal — 
the  cigars  are  passed  and  everything  is 
friendly,  but  at  the  same  time  frank — noth- 
ing is  hidden.  The  men  feel  free  to  take  up 
any  subject  that  seems  to  them  to  make  for 
a  better  understanding  or  a  better  production 
record.  They  feel  that  they  can  say  what  is 
on  their  minds  without  it  going  against  their 
records  as  workmen.  The  absence  of  the  fore- 
men makes  for  greater  freedom  in  this  regard. 

"Let  me  say  right  here  that  there  is  no 
voting.  I  give  final  decision  on  all  questions. 
If  the  decision  is  contrary  to  the  general 
opinion  of  those  present,  I  explain  carefully 
the  reasons  for  coming  to  the  conclusion  that 
I  do.  This  is  not  a  plan  where  the  men 
decide  management  questions,  as  is  done  in 
some  plants.  Rather  it  is  a  means  of  getting 
the  views  on  all  sides  before  the  executives 
make  a  decision.  .  .  . 

[31] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

"While  we  want  criticism  and  complaint 
to  come  out  in  these  gatherings,  we  want  con- 
structive criticism.  In  fact,  that's  why  we 
have  emphasized  the  name  'improvement 
meetings'  and  carefully  avoided  the  word 
'grievance.' 

"It  is  my  aim  to  act  immediately  upon 
any  suggestions  which  are  made  at  these 
meetings.  This  is  important,  as  it  impresses 
upon  the  man  the  value  of  his  good  advice. 

"The  men  appoint  their  own  secretary  and 
the  minutes  are  circulated  freely.  They  are 
posted  upon  all  of  the  bulletin  boards." 

Mr.  Cary  employs  a  few  more  than  six 
hundred  people,  and  divides  between  his  com- 
pany's profit-sharing  plan  and  the  improve- 
ment meetings — which  are  visible  expressions 
of  the  management's  point  of  view  on  its 
relations  with  workers — the  credit  for  the 
unusually  pleasant  and  profitable  character 
of  these  relations.  He  believes  that  the  plan 
is  practicable  for  an  organization  running  up 
to  about  one  thousand  employees,  and  in 
larger  organizations  if  the  plan  is  operated 
for  units  of  about  one  thousand  workers  each. 

A  plan  of  organization  that  has  proved 
popular  and  resultful  in  several  organiza- 
tions where  it  is  used  is  patterned  after  the 
organization   of   the   United   States   govern- 

[32] 


HOW  FAR  CAN  INDUSTRIAL  DEMOCRACY  GO? 

merit.  The  cabinet,  with  the  president  of  the 
company  at  its  head,  usually  consists  of  the 
executive  officers.  The  legislative  bodies  are 
a  senate  and  a  house  of  representatives.  In 
the  former,  all  foremen  and  heads  of  depart- 
ments are  members,  while  in  the  latter  sit 
elected  representatives  of  the  employees.  De- 
tails of  organization,  such  as  the  number  of 
constituents  represented  by  each  member  of 
the  house  of  representatives,  the  length  of 
a  representative's  term  of  office,  the  routine 
of  procedure,  subjects  legislated  on,  standing 
committees,  and  the  like,  vary  greatly  in 
different  concerns.  In  so  far  as  the  machinery 
thus  established  has  been  properly  encour- 
aged as  a  means  of  enabling  workers  to  express 
their  thoughts  on  matters  of  direct  mutual 
interest  to  themselves  and  the  management, 
it  has  proved  its  worth,  and  the  common  ex- 
perience has  been  that  the  veto  power,  which 
rests  with  the  cabinet,  rarely  need  be  exer- 
cised. 

There  seems  to  be  a  genius  for  social  self- 
regulation,  a  balance-wheel  force  acting  for 
moderation,  in  human  beings  who  have  a 
sense  of  their  responsibilities.  Those  who 
have  had  most  experience  testify  constantly 
that  workers  do  not  overstep  the  bounds  of 
fair  dealing  when  given  the  right  of  self- 

[33] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

management.  Face  a  man  with  a  condition 
that  closely  concerns  him.  Put  it  up  to  him  to 
decide  what  shall  be  done.  The  mere  fact 
that  he  will  have  to  live  with  his  decision, 
and  make  good  or  fall  down  on  it,  tends  to 
temper  his  decision  with  wisdom. 

This  genius  for  self-direction,  however,  dif- 
fers from  the  quality  required  for  manage- 
ment, which  has  duties  relating  to  the  or- 
ganization, co-ordination,  and  direction  of 
financial  and  material  forces,  in  addition  actu- 
ally to  executing  the  policies  of  the  human,  or 
social,  relationships  in  industry.  Manage- 
ment is  almost  synonymous  with  leadership. 
The  quality  of  leadership  in  a  distinguished 
degree  is  rare.  It  cannot  be  legislated  into 
existence.  Without  it,  the  best  machinery 
for  the  self-organization  of  workers  is  bound, 
sooner  or  later,  to  fall  of  its  own  weight.  I 
say  this  not  in  disparagement  of  any  plan  or 
type  of  plans,  but  because  it  is  so  often  an 
error  of  managers  to  believe  that  if  they  can 
find  just  the  right  scheme,  all  problems  of 
the  human  relationships  of  business  will  be 
immediately  solved.  It  is  no  such  thing.  The 
plan,  almost  any  fair  plan,  may  aid  manage- 
ment. But  it  can  never  overcome  fundamental 
faults  in  management,  in  leadership. 

There  is  much  proof  that  the  "house-and- 

[34] 


HOW  FAR  CAN  INDUSTRIAL  DEMOCRACY  GO? 

senate"  plan,  as  it  is  usually  called,  is  com- 
monly regarded  with  favor  by  the  workers.  I 
shall  cite  only  one  bit  of  evidence,  a  copy  of  a 
vigorous  letter  sent  by  the  house  of  represent- 
atives of  a  Cleveland  concern  to  union  lead- 
ers, when  the  latter  called  a  general  strike  of 
garment  and  clothing  workers  and  endeavored 
to  include  the  employees  of  this  concern.  The 
letter  reads: 

We,  the  members  of  the  house  of  representatives  of 
the  Printz-Biederman  Company,  have  been  elected 
by  the  employees  for  the  purpose  of  taking  up  all 
matters  pertaining  to  the  conditions  under  which  we 
work  and  for  the  purpose  of  making  the  rules  under 
which  we  work. 

In  the  past  three  years  we  have  reduced  the  working 
hours  from  forty-nine  and  three-quarters  to  forty- 
eight.  We  have  raised  wages  four  times  in  two  years. 
We  have  put  into  operation  a  wage  system  that  in^ 
creases  the  pay  of  each  employee  every  month,  in  ac< 
cordance  with  the  increase  in  the  cost  of  living. 

Our  wage  committee  fixes  the  prices  on  all  opera- 
tions with  the  management,  and  handles  all  complaints 
which  arise  regarding  wages. 

We  are  entirely  satisfied  with  our  working  conditions 
and  with  our  own  system  of  collective  bargaining.  We 
do  not  need  any  outsiders  to  help  us,  because  we  have 
fully  adequate  means  that  have  been  tested  out  by 
experience  to  meet  our  needs. 

By  threatening  to  call  a  strike  without  our  approval, 
you  are  trying  to  change  our  conditions,  which  we 

[35] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

repeat  are  entirely  satisfactory.  Certainly,  if  your 
union  is  sincere  in  its  claim  that  it  is  trying  to  assist 
the  workers,  it  can  prove  it  by  leaving  us  alone. 

Incidentally,  all  but  seven  of  the  nine 
hundred  and  fifty  employees  remained  at 
work  during  the  strike. 

The  idea  of  self-governing  employees  has 
been  carried  particularly  far  in  Filene's,  a 
Boston  department  store.  Through  the  Filene 
Co-operative  Association,  the  employees  regu- 
late every  activity  touching  themselves — an 
insurance  fund,  a  band,  extension  study 
courses,  athletics,  outings,  summer  camps, 
store  hours,  and  the  like.  I  am  going  to  quote 
rather  fully  from  Mr.  Filene's  description  of 
this  plan.1  Speaking  of  the  association,  which 
is  known  in  the  store  as  the  F.  C.  A.,  he  says: 

"Every  employee  belongs  to  it  by  virtue 
of  his  employment.  It  has  no  dues ;  a  member 
merely  pays  for  what  he  gets.  The  store  con- 
tributes part  of  a  floor  as  club  quarters  and 
aids  in  other  directions.  But  the  ultimate 
aim  of  the  organization  is  to  be  fully  self- 
supporting.  More  than  one  hundred  thousand 
dollars  now  flows  through  its  treasury  in  the 
course  of  a  year.  Its  present  organization  is 
a  growth. 

1"Why  the  Employees  Run  Our  Business,"  System,  December, 
1918,  and  January,  1919. 

[361 


HOW  FAR  CAN  INDUSTRIAL  DEMOCRACY  GO? 

"At  first  all  of  the  members  directed  its 
affairs  through  mass-meetings.  Then  that 
became  too  cumbersome  and  they  elected  a 
council  of  twenty-three  members,  just  as  the 
old  town  meetings  found  it  necessary  to  elect 
town  councils  the  more  easily  to  transact 
current  affairs. 

"The  council  is  responsible  to  the  members 
of  the  F.  C.  A.,  and  its  bi-weekly  meetings 
are  reported  back  to  the  members  through 
the  weekly  paper,  The  Echo,  or  by  written 
notice.  If  the  actions  of  the  council  do  not 
please  the  members,  they  reserve  the  right 
of  referendum  and  recall. 

"At  first  the  council  had  a  representative  for 
each  fifty  employees,  but  that  caused  the  large 
departments  to  have  a  preponderance  of  repre- 
sentation, so  now  the  council  contains  one  mem- 
ber for  each  of  the  twelve  sections  of  the  store, 
nine  members  elected  at  large,  and  the  officers. 
Directly  responsible  to  the  council  are  a  presi- 
dent, vice-president,  secretary,  and  treasurer, 
all  of  whom  are  elected  by  the  members. 

"Because  of  the  growing  activities  of  the 
association  it  became  impossible  for  any  em- 
ployee serving  in  the  association  to  give  ade- 
quate attention  both  to  the  store  and  the 
F.  C.  A.  This  resulted  in  the  establishment 
of  a  permanent  executive  secretary  and  staff. 

4  [37] 

43115 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

"The  executive  secretaryship  is  a  develop- 
ment of  the  office  of  welfare  manager  created 
some  eighteen  years  ago.  The  firm  at  that 
time  hired  a  manager  to  engage  and  discharge 
employees,  act  as  educational  director,  and 
generally  be  an  intermediary  between  the  firm 
and  the  people  and  to  assist  the  F.  C.  A. 
whenever  assistance  was  asked.  In  1907  we 
made  a  change;  we  abolished  the  office  of 
welfare  manager  and  instead  decided  to  pay 
a  salary  to  the  executive  secretary  of  the  asso- 
ciation. 

"The  secretary,  although  his  salary  is  paid 
by  the  store,  is  in  no  way  responsible  to  us. 
He  is  the  executive  and  administrative  head 
of  the  F.  C.  A.,  is  appointed  by  its  president, 
and  must  be  confirmed  by  a  five-sixths  vote 
of  the  council.  The  secretary  is  thus  the  in- 
termediary between  the  association  and  the 
store  management  and,  in  any  disputes  be- 
tween an  employee  and  the  store,  he  appears 
as  counsel  for  the  employee. 

"The  F.  C.  A.  has  at  least  three  absolute 
powers:  If  two-thirds  of  the  members  vote 
in  mass-meeting  to  change,  initiate,  or  amend 
any  rule  which  affects  the  working  conditions, 
the  vote  becomes  operative  at  once.  If  five- 
sixths  of  the  members  of  the  council  vote  for 
any  rule  or  its  repeal,  their  judgment  goes 

[38] 


HOW  FAR  CAN  INDUSTRIAL  DEMOCRACY  GO? 

into  effect  at  the  close  of  one  week,  unless  in 
the  mean  time  it  has  been  vetoed  by  the 
general  manager,  the  president,  or  by  the 
board  of  managers  of  the  corporation. 

"But  the  measure  may  go  in  force  in  spite 
of  the  veto  by  a  two-thirds  vote  of  the  mass- 
meeting  of  the  F.  C.  A.  This  power  is  so 
broad  that,  as  may  easily  be  seen,  it  will 
cover  almost  any  situation  that  may  be  ex- 
pected normally  to  arise,  for  there  are  precious 
few  things  which  do  not  affect  the  discipline 
or  working  conditions  of  the  store. 

"They  have  used  the  power  wisely.  One 
of  the  first  things  they  did  was  to  cut  down 
the  voluminous  rule-book  to  a  tiny  three-by- 
four-inch  pamphlet  of  seventeen  pages.  For 
a  mass  of  more  or  less  complicated  rules  they 
substituted  a  comparatively  few  fundamental 
ones  and  put  stress  on  the  spirit  of  the  inter- 
pretation instead  of  on  the  letter.  We  could 
not  have  done  that  because  we  could  not 
have  asked  that  laws  made  by  us  be  given 
other  than  the  strictest  reading." 

An  element  that  has  contributed  greatly 
to  the  success  of  the  self-direction  of  em- 
ployees in  this  concern  is  the  arbitration 
board.  It  is  in  effect  a  judiciary  with  twelve 
members.  Any  employee  may,  in  necessity, 
lay  his  case  before  it,  if  he  feels  that  he  has 

[391 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

been  unfairly  treated  in  any  decision  of  a 
superior  or  in  the  action  of  an  F.  C.  A.  com- 
mittee or  member.  The  cases  most  commonly 
heard  concern  dismissals,  shortages,  missing 
sales,  lost  packages,  breakages,  changes  in 
position  or  wages,  transfers,  and  location  in 
the  store.  The  duty  of  the  board  is  to  see 
that  justice  prevails,  by  conducting  an  ex- 
haustive examination  of  each  and  every  case. 

One  satisfying  fact  about  this  plan  is  that 
it  has  grown  gradually  and  normally  out  of 
conditions.  There  is  always  the  risk  in  bring- 
ing a  ready-made  plan  into  an  organization 
that  it  will  in  some  way  fail  to  adjust  itself 
to  the  temper  of  the  workers  or  the  manage- 
ment, and  may  thereby  do  more  harm  than 
good  in  the  end. 

The  International  Harvester  Company,  in 
proposing  its  plan  of  industrial  councils,  sub- 
mitted the  question  of  accepting  or  rejecting 
the  plan  to  a  vote  in  each  of  its  twenty  plants. 
Upon  the  first  vote  seventeen  of  the  plants 
accepted  it  by  a  majority  vote  and  three  re- 
jected it.  Later,  upon  the  initiative  of  the 
employees,  it  was  brought  up  for  reconsider- 
ation in  the  three  plants  that  at  first  voted 
against  it,  and  was  accepted  by  all  but  one. 

This  plan  has  some  novel  features.1     It  pro- 

1  The  full  text  of  the  constitution  is  given  in  Appendix  I. 
[40] 


HOW  FAR  CAN  INDUSTRIAL  DEMOCRACY  GO? 

vides  for  a  works  council  at  each  plant,  con- 
sisting of  elected  representatives  of  the 
employees  and  an  equal  or  less  number  of 
representatives  of  the  management.  A  rep- 
resentative of  the  employees  may  be  recalled 
by  a  majority  vote  of  his  constituents  if  at 
any  time  his  services  become  unsatisfactory 
to  them. 

The  company  pays  employees  at  the  regu- 
lar rate  for  the  time  they  are  forced  to  spend 
on  the  activities  of  the  works  council;  but, 
in  order  to  guarantee  the  man  the  right 
to  entire  freedom  of  action,  he  is  privileged 
to  arrange  for  compensation  to  be  paid  by 
oro-rata  assessment  among  the  employees. 

In  the  meetings  of  the  works  council  the 
representatives  of  the  management  and  of 
the  employees  vote  separately.  The  vote  of 
a  majority  of  the  employee  representatives 
is  taken  as  the  vote  of  all,  and  is  recorded  as 
their  unit  vote.  Similarly,  the  representatives 
of  the  management  record  a  unit  vote.  In 
case  of  a  tie  it  is  in  order  to  reopen  the  dis- 
cussion, and  to  offer  and  vote  on  a  substitute 
or  compromise  recommendation.  If,  then,  the 
vote  remains  a  tie,  the  question  may  be  re- 
ferred to  the  president  of  the  company.  It  is 
within  his  discretion  to  propose  a  settlement 
or  submit  the  question  to  a  general  council, 

(411 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

made  up  of  representatives  of  the  works 
councils  of  as  many  of  the  plants  as  in  his 
opinion  are  affected.  Failure*  to  reach  a 
settlement  in  either  of  these  ways  may  result 
in  referring  the  question  to  arbitration. 

Cyrus  McCormick,  Jr.,  of  this  company,  re- 
lates an  interesting  fact  in  proof  of  what  the 
plan  has  done  to  improve  the  condition  of 
workers.  The  management  never  knew  that 
about  one  hundred  men  were  working  for  the 
company  seven  days  a  week,  twelve  and  one- 
half  hours  a  day.  One  of  these  men  kicked, 
through  his  representative,  and  the  abuse  was 
stopped. 

It  has  been  a  rather  common  experience 
that  once  a  concern  establishes  the  machinery 
by  which  employees  can  reach  the  ear  of 
management  in  a  way  that  assures  the  adjust- 
ment of  unfavorable  conditions,  the  number 
of  cases  needing  attention  tends  to  decline. 
The  explanation  is  simple.  Everybody  knows 
that  the  machinery  exists  and  this  has  the 
effect  of  making  foremen  and  department 
heads  and  even  the  chief  executive  officers 
a  little  readier  to  see  that  complete  justice 
is  done  in  individual  cases. 

It  would  require  a  large  volume  to  describe 
in  detail  the  dozens  of  plans  that  have  been 
developed  in  plants  of  all   kinds  and  sizes 

[42] 


HOW  FAR  CAN  INDUSTRIAL  DEMOCRACY  GO? 

with  the  aim  of  providing  a  closer  mutual 
understanding  and  a  recognized  means  of 
handling  grievances  arising  between  manage- 
ment and  men.1  I  think  enough  has  been 
said,  however,  to  give  some  indication  of  the 
lines  along  which  these  activities  are  most 
commonly  undertaken. 

It  must  be  repeated  emphatically  and  never 
lost  sight  of  that  the  success  or  failure  of 
any  or  all  these  plans  depends  in  the  last 
analysis  upon  the  attitude  and  intentions  of 
the  management.  If  it  is  able  to  convince 
workers  of  its  thoroughgoing  righteousness, 
if  it  can  eradicate  the  distrust  too  often  bred 
in  the  past  by  blindly  autocratic  methods, 
nearly  any  good  plan  is  fairly  assured  of  suc- 
cess. Expedients  adopted  merely  through 
fear,  and  without  the  intention  of  complete 
justice,  are  bound  to  be  seen  through  by 
workers,  and  sooner  or  later  they  will  surely 
fail.  As  an  exceptionally  successful  employer 
said  to  me,  "You  can't  hand  men  lemons  and 
expect  to  get  back  oranges!" 

1  A  mass  of  information  on  the  subject  has  been  assembled  in  a 
report  by  A.  B.  Wolfe,  entitled,  Works  Committees  and  Joint  Indus- 
trial Councils.  Among  others,  the  Whiteley  Committee's  proposals 
in  Great  Britain  are  described  in  detail.  The  book  was  published 
by  the  Industrial  Relations  Division  of  the  Emergency  Fleet  Corpo- 
ration of  the  United  States  Shipping  Board,  January,  1919.  See 
also  American  Company  Shop  Committee  Plans,  published  by  the 
Bureau  of  Industrial  Research,  New  York,  1919,  for  a  digest  of 
twenty  plans  for  employees'  representation. 

[43] 


Ill 

WORKING    CONDITIONS   AND   INDUSTRIAL 
UNREST 

Effects  of  the  worker's  environment;  industrial  and  social 
aspects — Providing  good  working  conditions  is  not 
charity,  nor  a  substitute  for  wages — Experience  of  the 
Retail  Credit  Company — Why  workers  need  a  voice 
in  determining  conditions — The  responsibility  of  the 
management — Provisions  for  safety  and  health — Sani- 
tation— Restaurant  facilities — Congenial  fellow-workers 
— Alleviation  of  fatigue — Light,  heat,  and  ventilation — 
Industrial  medicine — Hours  of  work — Recreation — 
Beautification  of  surroundings. 

\  FILTHY  factory  toilet  is  a  symptom 
^*-  of  poor  management.  It  indicates  either 
carelessness  or  short-sightedness  in  regard  to 
the  conditions  under  which  employees  work. 
Short-sightedness  and  carelessness  are  bad 
for  the  management,  bad  for  the  worker. 

Prof.  Carleton  H.  Parker,  a  keen  student 
and  analyist  of  the  worker's  mind,  wrote: 
"The  shrewdest  I.  W.  W.  leader  I  found  said, 
'  We  can't  agitate  in  the  country  unless  things 
are  rotten  enough  to  bring  the  crowd  along.'"1 
The    worker's    environment,    the    conditions 

1  Survey,  March  21,  1914,  p.  769. 
[44] 


WORKING  CONDITIONS 

under  which  his  work  must  be  performed, 
and  all  the  incidental  contrivances  and  factors 
that  make  for  his  comfort  and  convenience, 
may  afford  an  effective  stimulus  to  efficiency; 
or,  if  these  things  are  unfavorable  and  ''rot- 
ten enough,"  they  may  become  a  powerful 
argument  for  discontent,  inefficiency,  dis- 
trust of  the  management,  and  all  the  evils 
potential  in  this  state  of  the  worker's  mind. 

The  inefficiency  that  is  nearly  certain  to 
result  when  the  worker  is  darkly  suspicious 
and  dissatisfied  is  in  itself  a  sufficiently  sound 
business  argument  in  favor  of  providing  ex- 
cellent working  conditions.  There  is  in  ad- 
dition the  social  argument.  Men  and  women 
who  work  in  surroundings  that  are  unhealthful 
or  dangerous,  or  that  induce  occupational 
diseases,  are  not  normally  capable  of  dis- 
charging as  well  as  they  should  their  duties 
as  citizens  and  parents.  Social  legislation,  in 
so  far  as  it  exercises  control  over  working  con- 
ditions, always  crystallizes  minimum  require- 
ments, a  fact  which  employers  sometimes  re- 
fuse to  recognize.  It  is  often  good  business 
to  go  farther  than  the  law  does. 

Many  employers  recognize  these  important 
facts.  Many  have  done  much  to  improve 
conditions.  And  some  of  them,  it  must  be 
confessed,  because  of  their  approach  to  the 

[45] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

problem,  have  run  head  foremost  into  the 
brick-wall  fact  in  human  nature  that  people 
do  not  want  mere  charity.  It  is  not  charity 
to  take  counsel  with  the  workers  in  regard  to 
reducing  working-hours,  when  the  hours  are 
unjustifiably  long;  nor  to  provide  safety  de- 
vices for  dangerous  machines,  and  to  devise 
methods  to  reduce  the  hazard  of  operations; 
nor  to  furnish  workers  with  pleasant  places 
in  which  to  eat  their  lunches,  sanitary  toilets, 
plenty  of  fresh  drinking-water,  and  convenient 
places  in  which  to  wash  up  and  dress;  nor  to 
make  arrangements  whereby  they  may  have 
some  form  of  outside  recreation,  if  they  wish  it. 
These  and  similar  activities  usually  con- 
sidered by  management  under  the  head  of 
"welfare  work" — a  term  that  frequently  be- 
comes odious  to  workers — are  not  charity. 
Still,  it  is  not  uncommon  to  hear  an  employer 
speak  smugly  of  what  he  has  done  along  these 
lines,  as  if  he,  being  somehow  superior  to  his 
workers,  was  making  them  happy!  That  is 
not  the  frame  of  mind  in  which  to  approach 
this  task  of  management.  The  manager  who 
tackles  the  problem  need  not  abandon  his 
keen  desire  for  profit,  which  is  his  aim  as  a 
business  man;  nor  need  he  seek  to  turn  him- 
self into  a  philanthropist,  which  at  best  is 
risky. 

[46] 


WORKING  CONDITIONS 

Good  working  conditions  are  good  business. 
They  are  the  worker's  right,  as  part  of  the 
contract  of  employment;  and  they  are  to  the 
employer's  best  interest,  because  the  worker 
who  is  pleasantly  situated  has  at  least  the 
right  start,  psychologically  and  in  other  ways, 
toward  efficient  work.  Cheat  a  man  of  his  self- 
respect  and  you  deprive  him  of  a  quality  that 
should  go  far  to  make  him  a  good  worker.  And 
no  man  is  likely  to  be  permanently  self-respect- 
ing who  is  forced  to  use,  day  after  day,  a  filthy 
toilet,  or  who  is  compelled  to  labor  at  a  machine 
that  is  insufficiently  lighted,  or  whose  work  is 
so  fatiguing  that  his  health  is  undermined. 

The  mental  state  of  workers  who  are  em- 
ployed where  conditions  are  good  is  expressed 
typically  in  such  phrases  as,  "It's  a  nice  place 
to  work";  "They  treat  you  right";  "They're 
pretty  liberal  folks."  Usually  there  goes  with 
the  words  a  subtle  indication  that  the  man 
is  glad  to  have  his  friends  know  where  he  is 
working.  It  is  not  to  be  supposed,  however, 
that  good  conditions  are  a  substitute  for 
wages.  Some  employers  have  learned  this 
lesson  thoroughly,  after  employees  for  whom 
they  had  supposedly  "done  a  lot"  have  turned 
upon  them  with  the  snarl  of  those  who  feel 
that  they  have  been  cheated  and  fooled. 

In  the  office  as  well  as  in  the  factory  the 

[47] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

surroundings  may  affect  the  quantity  and 
quality  of  work.  Witness  the  experience  of 
the  Retail  Credit  Company,  a  concern  which 
has  branch  offices  in  many  cities:1 

The  proper  exposure  is  important,  too,  if  the  best 
working  conditions  are  to  be  maintained.  Almost 
without  exception  a  west  side  is  undesirable.  The 
reason  is  that  where  a  west  light  prevails  the  afternoon 
sun  strikes  directly  on  desks  and  other  equipment; 
the  glare  not  only  gets  on  the  nerves  of  employees, 
but  it  also,  by  actual  tests,  slows  up  the  progress  of 
our  work  at  the  most  critical  time  of  day.  Our  experi- 
ence is  that  the  best  exposure  is  east  or  north.  Like- 
wise, our  second  choice  is  south  and  our  third  west. 

The  outlook  from  any  office,  though  perhaps  a  seem- 
ing trifle,  is  significant  when  the  time  consumed  is  multi- 
plied by  the  number  of  times  a  day  the  attention  of  all 
employees  is  distracted  by  outside  noise  and  other  influ- 
ences. An  office  above  the  seventh  floor  is  less  subject  to 
the  distractions  of  the  street  than  quarters  below  the 
fifth  floor.     But  that  is  not  the  only  consideration. 

When  an  executive  looks  out  of  the  window  as  he 
turns  over  some  question  in  his  mind  he  is  likely  to 
be  thrown  out  of  tune  if  something  catches  his  eye  in 
an  office  across  the  way.  And,  recognizing  this  fact,  we 
have  rated  the  various  office  outlooks  in  the  order  of 
desirability;  outside  distant  view;  outside  cut-off  view; 
large  court. 

Many  factors  enter  into  the  consideration 
of  proper  working  conditions;  for  example, 

lc,Why  All  Our  Offices  Face  Northeast,"  by  George  A.  Bland, 
System,  June,  1919. 

U81 


WORKING  CONDITIONS 

the  climate,  the  nature  of  the  work,  the 
temperament  or  sex  of  the  workers,  and  in- 
dividual preferences.  Because  there  are  many 
factors,  so  many  that  the  management  can- 
not have  a  complete  and  intimate  knowledge 
of  them  all,  it  is  particularly  feasible  to  take 
counsel  with  the  workers  looking  to  plans  for 
improvement.  In  this  field,  as  well  as  in  de- 
termining wages,  machinery  for  the  inter- 
change of  ideas  between  workers  and  man- 
agement, such  as  was  described  in  the  last 
chapter,  may  especially  prove  its  worth.  Lit- 
tle irritants  that  cause  the  worker  discomfort 
physically  or  mentally  may  do  mere  to  make 
him  dissatisfied  than  some  of  the  intrinsically 
more  important  things.  Hence  the  importance 
of  getting  his  ideas. 

The  problem  in  its  larger  aspects  cannot 
safely  be  left  to  workers,  however.  They  do 
not  ordinarily  have  the  facilities  that  the 
management  has  to  learn  of  or  to  develop 
new  inventions,  processes,  and  methods  that 
may  improve  conditions.  It  is  a  task  in  which 
the  best  results  are  obtained  when  the  manage- 
ment and  the  workers  are  in  close  co-operation 
and  sympathy,  and  work  together  by  the  con- 
stant exchange  of  suggestions. 

The  typical  worker,  for  instance,  would 
certainly  have  realized  his  discomfort  under 

[49] 


COMMON  SENSE   IN  LABOR  MANAGEMENT 

conditions  which  at  one  time  prevailed  in  a 
Wisconsin  company.  Production  in  this  plant 
had  normally  been  heaviest  from  early  spring 
until  late  in  the  summer,  the  period  of  largest 
sales.  On  hot  days,  men  working  over  heated 
ware  for  several  minutes  at  a  time  found  the 
temperature  almost  unbearable.  It  was  a 
task  of  management  to  work  out  the  plan 
that  remedied  this  condition,  which  it  did 
by  altering  operation  so  that  the  heaviest 
manufacturing  is  now  done  in  the  period  from 
early  autumn  to  late  spring.  On  excessively 
hot  days  in  summer  certain  departments  are 
closed. 

Again,  the  typical  worker  in  the  same  plant 
would  readily  enough  have  realized  that  sand- 
blasting is  not  pleasant  work.  It  would  prob- 
ably have  been  beyond  his  ability,  however, 
to  design  the  special  automatic  machines  that 
now  serve  to  make  most  of  the  personal  con- 
tact with  the  work  unnecessary. 

When  the  workers  feel  free  to  communi- 
cate their  ideas  about  undesirable  conditions, 
knowing  that  the  management  will  accept 
these  suggestions  in  the  spirit  in  which  they 
are  offered  and  make  the  proper  use  of  them, 
both  the  managers  and  the  workers  may  profit. 

The  subject  is  broad.  It  includes  problems 
the   solution   of   which   calls   for   specialized 

[50] 


WORKING  CONDITIONS 

knowledge  in  many  directions.  Here  I  can 
hope  to  do  little  more  than  sketch  some  of 
the  principal  directions  in  which  activity  is 
possible  and  generally  profitable. 

I.  Safety.  Under  this  heading  falls  all  that 
may  endanger  the  worker's  life  or  limb,  as 
well  as  conditions  that  menace  his  health. 
The  tasks  of  accident-prevention  are  two- 
fold: (a)  to  install  devices  that  will  minimize 
the  risk  at  hazardous  machines  or  equipment; 
(b)  to  train  the  workers  to  be  careful.  In 
well-safeguarded  plants  nine-tenths  of  the 
accidents,  as  a  rule,  are  due  to  the  carelessness 
or  ignorance  of  the  men.  Even  in  plants  not 
so  well  protected  the  percentage  of  accidents 
so  caused  is  large.  Therefore,  while  safe- 
guarding is  essential,  the  problem  of  educat- 
ing the  men  in  habits  of  caution  is  more  seri- 
ous. In  many  plants  a  committee  is  organized 
in  each  department  for  the  promotion  of 
safety  ideas,  supplemented  by  the  work  of  a 
general  safety  committee,  schemes  for  warn- 
ing workers  by  signs  at  dangerous  points,  bul- 
letins with  general  suggestions,  and  the  like. 
It  should  be  noted  that  the  shop  safety  com- 
mittee is  one  of  the  first  steps,  historically, 
in  the  direction  of  self-government  among 
employees  in  large  plants.  The  effectiveness 
of  these  committees  argues  that  they  are  likely 

[51] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

to  prove  similarly  satisfactory  in  working  out 
other  problems  of  concern  to  the  workers. 

Health  hazards  are  common  in  industry. 
Nearly  every  kind  of  production  has  those 
that  are  peculiar  to  itself. 

Dust,  fumes,  poisonous  work  materials,  bad  air, 
bad  lighting,  dirt,  inadequate  sanitary  provision,  result 
in  sick  workers  and  poor  production.  ...  In  the  dusty 
trades  the  relation  between  the  occupation  and  diseases 
which  shorten  the  lives  of  many  workers  is  more  con- 
spicuous than  the  insidious  dangers  which  sap  the 
vitality  of  workers  in  other  kinds  of  production.  Lead 
poisoning  has  been  found  among  workers  of  many 
trades.  Obnoxious  and  poisonous  fumes  characterize 
the  chemical  trades.  Makers  of  explosives  handle 
poisons  that  have  serious  dermatic  and  systemic  effects. 
Those  who  use  cutting-oils  are  liable  to  contract 
furunculosis,  folliculitis,  and  other  skin  diseases.  Min- 
ers, leather-workers,  textile  operatives,  and  workers 
in  practically  every  industry  are  liable  to  special  risks, 
not  the  least  of  which  are  diseases  of  the  lungs  and 
respiratory  tracts.1 

Some  of  the  problems  of  safety  and  health 
require  most  expert  professional  service.  A 
case  in  point  from  one  industry  is  instanced 
in  the  following:2 

1  "Treatment  of  Industrial  Problems  by  Constructive  Methods," 
a  bulletin  issued  by  the  Working  Conditions  Service  of  the  U.  S. 
Department  of  Labor. 

2  "Inorganic  Poisons,  Other  Than  Lead,  in  American  Industries," 
Alice  Hamilton,  M.D.  A  lecture  delivered  at  the  Harvard  Medical 
School  and  published  in  The  Journal  of  Industrial  Hygiene,  June, 
1919,  p.  89. 

[52] 


WORKING  CONDITIONS 

It  is  excessively  hard  to  protect  workers  in  Paris 
green.  .  .  .  The  powder  is  very  light  and  fluffy  and  it 
has,  so  far,  been  impossible  to  carry  out  mechanical 
packing.  No  protection  can  be  worn  which  makes  the 
skin  perspire,  for  perspiration  only  increases  the  danger 
of  ulceration.  Respirators  do  this  by  pressing  on  the 
skin  and  making  it  soft  and  thin.  The  best  procedure 
seems  to  be  to  plug  the  nostrils  lightly  with  cotton,  to 
plug  the  ears  in  the  same  way,  and  to  smear  the  face 
over  with  some  bland  ointment.  A  full  shower-bath 
ought  to  be  taken  at  the  end  of  work  and  the  work- 
clothes  should  be  clean  each  day.  Even  with  all  these 
precautions,  the  largest  factory  in  Illinois  has  cases  of 
arsenical  ulcerations  of  the  nostrils,  perforations  of 
the  septum,  ulcers  at  the  corners  of  the  mouth,  around 
the  genitals,  and  even  on  the  feet  from  wearing  leaky 
rubber  boots. 

It  is  no  answer  to  problems  like  this  to  offer 
higher  wages  for  the  hazardous  jobs.  Devices 
must  be  perfected,  and  workers  trained,  to 
minimize  the  hazard. 

II.  Sanitation.  Vast  improvements  have 
been  made  in  toilet  facilities,  lavatories, 
shower-baths,  decently  clean  floors  and  win- 
dows, dressing-rooms,  lockers,  or  other  equip- 
ment for  the  accommodation  of  clothes  and 
the  disposal  of  wastes.  One  need  not  be  very 
old  to  remember  the  days  of  dark  and  dirty 
closets,  the  cigar-clogged  urinal,  the  unsightly 
wash-bowl,  and  the  roller-towel  that  had  to 
do  for  an  indefinite  period,  regardless  of  the 

5  [53] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

number  of  men  using  it.  In  many  factories 
you  still  find  no  provision  made  for  the 
workers'  clothes.  Often  they  hang  on  nails 
by  the  windows,  unsightly,  and  obstructing 
the  light. 

Sufficient  drinking-fountains  and  lockers 
are  part  of  the  equipment  of  every  up-to-date 
factory,  and  shower-baths  are  very  commonly 
provided  for  dusty  work.  Such  equipment 
makes  for  the  self-respect  and  health  of  the 
worker,  and  very  often  it  does  more,  helping 
him  to  increase  his  output  and  earnings  by 
saving  his  time. 

III.  Restaurant  Facilities.  The  worker  who 
eats  a  cold  lunch  at  his  bench,  or  in  some  cor- 
ner of  the  shop,  may  not  be  so  fit  after  lunch  as 
his  fellow-worker  who  gets  a  well-cooked  hot 
meal  inside  of  him.  Factories  are  often 
located  where  there  are  no  adequate  restau- 
rants. This  has  led  to  the  installation  in  many 
plants  of  various  kinds  of  facilities,  ranging 
from  gas  stoves  or  plates  and  rough  benches, 
where  the  workers  heat  up  and  eat  the  lunches 
they  bring  from  home,  to  elaborate  restau- 
rants, run  on  a  business  basis,  but  usually 
without  profit,  where  the  workers  can  select 
their  food  in  as  great  variety  as  in  any  other 
restaurant.  A  case  in  point,  fairly  repre- 
sentative, is  the  Firestone  Tire  and  Rubber 

[54] 


WORKING  CONDITIONS 

Company,  where  meals  are  served  in  three 
ways.  Factory-workers  have  one  cafeteria  to 
themselves;  the  office-workers  have  another; 
and  the  department  heads  and  executives  are 
privileged  to  eat  at  tables  where  service  is 
provided.  These  restaurants  are  located  in 
the  Firestone  Club,  a  well-equipped  building 
across  the  street  from  the  plant.  The  club 
provides,  in  addition  to  the  restaurant,  bowl- 
ing-alleys, a  swimming-pool,  an  auditorium,  a 
gymnasium,  and  other  facilities  for  recreation 
to  members.  All  employees  of  the  company  who 
pay  the  yearly  dues,  amounting  to  one  dollar 
for  women  and  two  dollars  for  men,  may  join. 

Some  concerns  which  work  with  employees 
to  improve  housing  conditions  have  found  it 
important  to  keep  the  employees'  lunch  hour 
in  mind,  locating  the  houses  close  enough  to 
the  factory  to  allow  workers  to  eat  at  home. 
This  usually  helps  the  workers  to  economize, 
and  has  social  advantages.  At  Bridgeport  one 
group  of  houses  is  close  enough  to  permit  three 
thousand  workers  to  go  home  at  the  noon  hour. 

The  plan,  as  is  always  the  case,  must  be 
designed  to  suit  local  conditions.  It  is  safe 
to  say  that  few  sizable  plants  any  longer  com- 
pletely neglect  the  lunch-hour  problem.  The 
day  when  the  workman  had  to  warm  his 
coffee-bottle  on  the  steam  pipes  for  lack  of  a 

[55] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

better  method  is  definitely  passing.  The  shop 
restaurant  also  offers  excellent  possibilities  of 
building  up  a  good  social  spirit  in  the  plant. 

IV.  Congenial  Fellow-workers.  A  man  who 
works  at  the  side  of  men  with  whom  he  can 
be  friendly  and  sociable  may  be  either  a  better 
or  a  worse  worker  on  that  account.  If  the 
companionship  is  evil,  the  effect  on  his  work 
is  likely  to  be  bad;  if  it  is  good,  the  reverse 
may  be  true.  Wholly  uncongenial  fellow- 
workers  may  seriously  impair  a  man's  efficien- 
cy. And  in  any  case  it  is  good  business  at 
least  to  give  the  worker  a  chance  to  express 
himself  on  this  point  if  he  wishes  to  do  so. 
Lack  of  such  an  opportunity  may  easily  drive 
him  to  seek  work  elsewhere. 

Proper  placing  of  men  when  they  first  come 
to  work  tends  to  avert  a  good  deal  of  trouble 
and  dissatisfaction.  Even  so,  a  worker  may 
find  himself  out  of  tune  with  his  surroundings. 
In  the  Callaway  Mills  at  Lagrange,  Georgia, 
the  shifting  about  of  men  is  handled  through 
an  office  known  popularly  as  the  "bull-pen." 

Any  man  who  so  wishes  may  request  a 
transfer  to  another  department,  or  even  to 
another  of  the  company's  mills,  without  en- 
dangering his  tenure  of  his  job. 

The  old  plan  left  it  entirely  up  to  the  man's 
foreman.    If  he  happened  to  be  in  ill  humor, 

[56] 


WORKING  CONDITIONS 

he  might  reply  that  if  the  workman  didn't 
like  it  where  he  was,  he  could  "get  to  hell 
out" !  The  new  plan  saves  the  hiring  of  many 
new  workers. 

V.  Alleviation  of  Fatigue,  This  is  a  large 
problem.  It  has  ramifications  in  many  direc- 
tions, and  involves  the  study  of  conditions 
under  which  the  human  machine  is  best  able 
to  stand  the  strain  of  work;  the  development 
of  mechanical  equipment  to  make  heavy  lift- 
ing and  over-strenuous  physical  feats  unnec- 
essary; the  devising  of  special  chairs  or  stools 
where  the  work  is  such  that  the  worker  must 
remain  seated  while  at  the  job;  the  provision 
of  rest-periods,  rest-rooms,  and  the  like.  The 
Woman  in  Industry  Service  of  the  United 
States  Department  of  Labor  has  made  the 
following  recommendations  for  plants  in  which 
women  are  employed: 

"A  rest-period  of  ten  minutes  should  be 
allowed  in  the  middle  of  each  working-period 
without  thereby  increasing  the  length  of  the 
working-day.  Continuous  standing  and  con- 
tinuous sitting  are  both  injurious.  A  seat 
should  be  provided  for  every  woman  employed 
and  its  use  encouraged.  It  is  possible  and 
desirable  to  adjust  the  height  of  the  chairs 
in  relation  to  the  height  of  machines  or  work- 
tables  so  that  the  worker  may  with  equal  con- 

[57] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

venience  and  efficiency  stand  or  sit  at  her  work. 
The  seats  should  have  backs.  If  the  chair  is 
high,  a  foot-rest  should  be  provided." 

The  principal  purpose  of  motion  and  time 
studies  is  to  enable  the  worker  to  eliminate 
the  extra,  useless  motions  which  do  so  much 
to  increase  fatigue,  and  to  arrange  the  ma- 
terials of  work  so  there  is  less  lifting  and 
walking.  In  many  plants  such  studies  have 
resulted  in  methods  that  enable  the  worker 
to  increase  his  output  and  his  earnings  with 
actually  less  fatigue. 

So  simple  an  expedient  as  a  rest-room,  with 
a  few  cots  where  workers  afflicted  with  head- 
aches, over-fatigue,  or  other  simple,  tempo- 
rary ailments,  can  lie  down  for  an  hour  or  so, 
often  serves  to  put  the  worker  in  condition 
so  that  he  can  save  his  wages  for  the  rest  of 
the  day  and  the  company  saves  his  time. 

VI.  Light,  Heat,  and  Ventilation.  Work 
that  is  poorly  lighted  is  fertile  in  delays  and 
errors ,  and  accidents  are  frequent.  A  worker 
who  is  forced  to  do  his  work, in  a  place  that  is 
too  hot  or  too  cold,  or  that  is  improperly 
ventilated,  cannot,  it  has  been  demonstrated, 
do  the  best  work.1 

1  The  reader  who  wishes  to  pursue  the  subject  may  find  excellent 
material  on  interior  lighting  in  the  following:  "What  It  Pays  to 
Know  About  Factory  Lighting,"  Prof.  C.  E.  Clewell,  Factory, 
August,  1917,  to  January,  1918,  inclusive. 

[581 


WORKING  CONDITIONS 

Lighting  is  a  science  in  which  very  rapid 
improvements  have  been  made.  Daylight  is 
the  best  possible  kind  of  light,  of  course,  as 
well  as  the  most  economical ;  and  the  tendency 
in  factory  construction  is  toward  buildings 
with  saw-tooth  roofs  or  practically  all-window 
walls,  which  admit  the  greatest  amount  of 
daylight. 

The  open  window  is  the  old  idea  of  ventila- 
tion. It  is  good  as  far  as  it  goes,  but  it  has 
definite  limitations.  In  certain  kinds  of  pro- 
duction, and  in  bad  weather,  the  windows 
must  be  kept  closed.  Recommendations  on 
heating  and  ventilation  prepared  by  Mr. 
Werner  Nygren,  consulting  engineer,  and  Dr. 
Rudolph  Hering  cover  the  following  points  as 
fundamentally  essential : 1 

1.  The  air  should  be  free  from  dust,  patho- 
genetic bacteria,  and  other  contamination; 

2.  A  sufficient  amount  of  air,  properly 
tempered  and  distributed,  and  varying  with 
the  location  of  the  room,  the  window  surface, 
and  other  conditions,  should  be  supplied; 

3.  Allowance  must  be  made  for  the  com- 
bustion of  gas  and  oil  burned  for  illumination 
and  other  purposes; 

4.  The  room  temperature  should  be  kept 
constant  and  agreeable; 

'See  The  National  Civic  Federation  Review,  March  25,  1919,  p.  8. 
[59] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

5.  Proper  attention  must  be  given  to  hu- 
midity ; 

6.  Draughts  should  be  avoided; 

7.  Excessive  heat,  vapor,  and  injurious  sub- 
stances arising  from  manufacturing  processes 
and  other  sources  require  to  be  locally  re- 
moved ; 

8.  Radiators  and  heating  coils  need  in- 
dividual controlling  devices,  and  must  be 
so  located  as  not  to  cause  discomfort; 

9.  Hot  surfaces,  which  by  nature  of  their 
use  do  not  require  to  be  exposed,  should  be 
insulated  by  non-conducting  material; 

10.  The  design  of  heating  and  ventilating 
installations  is  as  important  as  the  air  quan- 
tities supplied. 

The  solution  of  all  these  problems  requires 
technical  skill.  Management  is  interested  in 
the  proved  fact  that  workers  can  do  their 
best  work  only  under  conditions  that  assure 
them  comfort  and  health. 

VII.  Industrial  Medicine.  The  government 
will  not  accept  for  military  service  men  phys- 
ically unfit  in  certain  ways.  It  is  recognized 
that  a  man  with  flat  feet,  bad  eyesight,  con- 
sumptive tendencies,  or  other  disabilities,  is 
usually  more  of  a  hindrance  than  a  help  on 
active  duty.  In  the  same  way  certain  in- 
dustrial tasks  are  too  severe  for  men  who  are 

[60] 


WORKING  CONDITIONS 

physically  unfit  in  one  way  or  another;  and 
these  men  may  not  only  be  disqualified  for 
certain  kinds  of  work,  but  they  may  also  be 
a  menace  to  the  health  or  life  of  fellow- 
workers.  On  the  other  hand,  men  with  cer- 
tain minor  disqualifications  may  do  admirably 
some  kinds  of  work.  It  is  becoming  more 
common,  therefore,  to  provide  for  physical 
examinations  at  the  time  of  employment. 
The  spread  of  venereal  diseases  and  other  in- 
fectious ailments  may  thus  be  checked. 

Some  concerns,  having  the  same  purposes 
in  mind,  also  insist  on  periodical  physical  ex- 
aminations. A  medical  department  in  a  plant 
may  also  help  in  the  way  of  educating  workers 
who  are  ignorant  of  proper  ways  to  care  for 
themselves,  who  fail  to  take  adequate  care 
of  their  teeth,  or  their  diet,  or  who  are  afflicted 
with  organic  diseases  of  the  presence  of  which 
they  are  entirely  ignorant.  The  department 
also  gives  first  aid  to  injured  workers  and  to 
those  who  become  suddenly  ill ;  and  it  may  give 
valuable  service  by  refusing  to  permit  work- 
ers who  have  been  ill  or  injured  to  resume 
work  until  they  are  fully  able  to  do  so.  In  all 
of  these  ways  the  department  is  of  equal 
benefit  to  the  management  and  the  workers. 
It  is  true  that  workers  do  not  always  recog- 
nize the  benefits.    But  that  is  usually  due  to 

[61] 


COMMON  SENSE   IN   LABOR  MANAGEMENT 

the  failure  of  management  to  use  effective 
methods  to  overcome  natural  hesitancy,  fear, 
or  ignorance — in  other  words,  to  "sell"  the 
plan  to  workers. 

A  typical  result  of  such  a  department,  of 
direct  interest  to  management,  is  disclosed 
in  the  following  experience  at  the  Remy 
Electric  Company's  plant : x 

Nearly  forty-five  hundred  new  employees  were  ex- 
amined to  keep  three  thousand  positions  filled.  In 
one  department  the  work  is  of  such  a  character  that  it 
costs  one  hundred  dollars  to  teach  a  new  employee  to 
become  proficient.  The  work  is  strenuous,  requiring 
the  employee  to  stand,  and  the  pay  is  accordingly 
large.  During  the  six  months  prior  to  the  establish- 
ment of  compulsory  examination  before  employment 
twenty-five  employees  asked  for  transfer  to  other  de- 
partments, and  this  transfer  cost  the  company  all  the 
money  which  it  had  invested  in  training  these  employees 
for  their  special  work.  Since  physical  examination 
before  the  hiring  of  an  applicant  has  been  instituted 
many  applicants,  for  physical  reasons,  are  not  permitted 
to  work  in  the  departments  selected  for  them  by  the 
employment  office.  Suitable  positions,  however,  can 
nearly  always  be  found  for  these  sub-standard  indi- 
viduals. 

VIII.  Hours  of  Work.  No  problem,  except 
wages,  is  more  commonly  a  bone  of  contention 

1  Quoted  from  an  address  by  Dr.  Maynard  A.  Austin,  entitled, 
"Medical  Inspection  of  Factory  Employees,"  printed  in  The  Journal 
of  Industrial  Hygiene,  June,  1919,  p.  103. 

[62  1 


WORKING  CONDITIONS 

between  the  management  and  workers  than 
the  hours  of  work.  The  time  a  man  has  to 
himself  away  from  his  job  is  one  of  his  most 
precious  possessions,  when  he  is  not  keenly 
interested  in  his  work.  And  it  is,  I  believe, 
a  more  serious  indictment  against  industrial 
conditions  and  management  methods  than  is 
commonly  supposed  that  the  debate  on  this 
question  should  be  so  serious  and,  commonly, 
acrimonious.  It  is  unquestioned  that  certain 
types  of  work  are  so  arduous  that  short  hours 
are  essential.  And  it  is  not  to  the  interest 
of  the  employer  or  of  the  employee  that  the 
work  should  be  continued  beyond  a  reason- 
able period.  The  worker  tends  to  lose  his 
health  or  resilience,  and  he  has  no  proper  op- 
portunity to  participate  in  social,  recreational, 
and  educational  activities.  The  employer,  on 
the  other  hand,  buys  the  work  of  a  decreasingly 
efficient  man. 

But  when  hours  of  work  are  on  an  admit- 
tedly reasonable  basis  the  agitation  for  fur- 
ther decreases  means  that  the  management 
has  failed  to  make  work  interesting  or  even 
reasonably  satisfying,  and  the  worker  arrives 
at  the  natural  determination  to  get  all  that 
he  can  and  give  as  little  as  he  can.  It  is  a 
symptom  of  the  failure  of  the  management  to 
gain  the  interest,  co-operation,  and  confidence 

[63] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

of  workers.  As  a  symptom,  it  is  worthy  of 
very  serious  consideration. 

The  worker  may  be  wholly  right  in  his  re- 
quest for  shorter  hours.  His  work  may  be 
too  exacting.  If  that  is  the  case,  it  may  be 
distinctly  an  advantage  to  the  employer  to 
shorten  the  hours.  But  if  the  request  is  not 
justified  on  that  score,  the  employer  still 
needs  to  examine  his  methods  carefully  to 
discover  what  it  is  in  his  management  methods 
that  has  failed  to  make  the  worker  pleased  with 
his  work  and  satisfied  to  carry  it  on  through 
a  reasonable  period.1 

IX.  Recreation.  I  mentioned,  in  passing, 
the  recreational  facilities  of  the  Firestone 
Club.  The  kind  of  recreation  that  the  worker 
takes  may  have  a  direct  bearing  on  the  quality 
of  his  work.  It  is  therefore  a  matter  of  in- 
terest to  the  employer.  It  is  commonly  held 
to  be  improper  and  undesirable  for  an  em- 
ployer to  try  in  any  way  to  supervise  the 
direction  of  the  recreation.  But  it  has  proved 
wise  for  employers  to  give  the  workers  the 
opportunities  for  sane,  constructive  recrea- 
tion,  when  these  facilities  would  otherwise 

1  Extended  investigations  of  this  subject  in  the  cotton  and  wool 
manufacturing'  industries  have  been  made  by  the  National  Industrial 
Conference  Board,  and  the  results  published  in  Research  Reports, 
4,  7,  and  12.  See  also  the  reports  of  the  British  Health  of  Munition 
Workers'  Committee. 

[64] 


WORKING  CONDITIONS 

be  lacking.  Whether  or  not  employees  take 
advantage  of  the  opportunities  rests  with 
them.  And  the  advantage  that  they  do  take 
of  these  opportunities,  and  the  effect  they 
have  upon  the  attitude  of  the  workers  toward 
the  management,  depend  in  large  measure 
upon  the  employer. 

Here,  as  always,  there  is  the  danger  of  seem- 
ing paternalistic  or  patronizing.  Recreational 
opportunities  offered  in  that  spirit  are  bound 
to  have  a  bad  effect.  But  there  is,  in  the  nat- 
ure of  things,  no  reason  why  the  employer 
should  offer  them  in  that  spirit.  He  is  not 
doing  something  "for  the  workers."  He  may 
delude  himself  into  believing  that  he  is.  But 
he  cannot  fool  the  workers.  They  know  that 
he  is  doing  something  for  himself,  seeking  to 
develop  better-minded  or  better-bodied  work- 
ers. Only  as  he  accepts  this  fact  frankly  and 
conveys  it  to  the  workers  is  he  likely  to  profit 
in  the  long  run  by  any  activities  of  this  sort 
that  he  may  sponsor. 

X.  Beautification  of  Surroundings.  What 
the  worker  sees  about  him  at  his  work  may 
affect  the  quality  and  quantity  of  his  work. 
Man  seems  naturally  to  react  favorably  to 
beauty.  Flowers  at  the  windows,  ivy  on  the 
walls,  architecture  that  is  handsome  while  it 
is  appropriate,  interior  layouts  that  are  pleas- 

[65] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

ing  without  being  inefficient — these  and  other 
things  may  tend  to  create  in  the  minds  of 
many  workers  a  psychological  state  that  is 
conducive  to  good  work.  There  can  perhaps 
be  no  definitely  scientific  appraisement  of  the 
results  of  this  kind  of  activity,  yet  many  em- 
ployers who  have  given  it  careful  study  and 
trial  believe  profoundly  in  its  efficacy.  It  is 
perhaps  particularly  worthy  of  application  in 
the  case  of  women  and  workers  of  nationali- 
ties whose  temperament  and  training  make 
them  naturally  most  responsive  to  beautiful 
surroundings. 

Perhaps  the  wisest  plan  is  that  which  pro- 
poses to  the  workers  the  opportunity  to  have 
or  reject  certain  improvements  of  this  sort. 
When  the  thought  is  released  in  the  organiza- 
tion seriously  and  in  the  right  way  it  often 
proves  a  valuable  bond  for  closer  sympathy 
and  understanding  between  the  management 
and  the  workers. 

So  much  for  these  ten  main  classes  of  sub- 
jects grouped  under  the  general  head  of  work- 
ing conditions.  I  have  tried  to  indicate  that 
these  are  not  mere  niceties  of  management 
planned  without  much  relation  to  the  profit- 
making  activities  of  the  industry.  Unless 
they  do  have  a  relation  to  these  activities, 
immediate  or  indirect,  they  can  hardly  justify 

J  66  J 


WORKING  CONDITIONS 

themselves  in  any  event.  Their  purpose  is 
to  provide  surroundings  in  which  men  and 
women  may  work  comfortably  and  efficiently 
and  with  good -will  toward  the  management. 


IV 


LIVING    CONDITIONS    AND    INDUSTRIAL   UNREST 

A  worker  who  was  made  over — The  evil  influence  of  bad 
housing — Is  improvement  a  task  for  the  employer? — 
The  individual  renter  or  buyer  in  the  position  of  an 
inferior  bargainer — Experience  at  Bridgeport,  Connecti- 
cut— The  dangers  of  paternalism — The  Firestone  Tire 
and  Rubber  Company's  plan — Homes  for  workers  at 
Lagrange,  Georgia,  and  Kohler,  Wisconsin  —  When 
should  the  worker  buy  a  home? — An  association  of 
employers;  the  Bridgeport  plan — The  Norton  Com- 
pany's plan — Planning  groups  of  houses — Conclusion 
as  to  the  importance  of  good  housing — Should  the  em- 
ployer interest  himself  in  the  worker's  out-of-doors 
habits? — When  the  employee  welcomes  counsel  or  as- 
sistance— The  risk  of  meddling — Success  depends  on 
sincerity. 

npO  what  extent  is  it  desirable  and  "good 
*■  business"  for  the  employer  to  concern 
himself  about  the  manner  of  life  of  his  workers? 
Consider  the  case  of  Harvey  Thompson. 
The  man's  name  is  not  Thompson,  but  it 
will  serve  to  identify  him.  Thompson  is  a 
tire-builder  in  one  of  the  rubber  factories  of 
Akron,  Ohio.  He  earns  from  six  to  eight 
dollars  a  day  and  supports  a  wife  and  family. 
It  used  to  be  that  Thompson  never  worked 

[68] 


LIVING  CONDITIONS 

more  than  four  days  out  of  the  seven.  That 
was  when  he  lived  in  a  hit-or-miss  fashion, 
moving  frequently,  staying  for  a  while  in  a 
lodging-house  and  another  while  in  a  stuffy 
little  flat  or  dingy  house.  In  those  days 
Thompson  had  no  pride  in  his  home.  He 
could  earn  enough  by  working  four  days  a 
week  to  pay  his  rent  and  keep  himself  and 
his  family  supplied  with  the  things  they 
needed  most.  Beyond  that  he  did  not  care. 
Housing  conditions  were  not  good.  It  was 
war-time  and  the  supply  of  houses  was  in- 
adequate for  the  number  of  workers. 

Thompson  accepted  the  situation.  His  em- 
ployer, however,  did  not  accept  it. 

Possessed  of  larger  means  and  a  larger 
industrial  imagination  than  Thompson,  he 
bought  a  tract  of  land  not  too  far  from  the 
plant — and  not  so  close  as  to  be  in  the  shadow 
of  the  factory  chimneys— and  contracted  for 
the  erection  of  a  number  of  houses.  He  was 
careful  that  not  all  were  designed  alike  out- 
side or  in,  nor  were  they  all  of  the  same  ma- 
terials. Some  were  brick,  others  were  frame, 
and  still  others  were  stucco.  In  fact,  when 
the  first  row  of  houses  was  well  under  way 
they  had  the  general  appearance,  in  size  and 
variety,  of  the  middle-class  houses  that  you 
can  find  on  almost  any  typical  street  in  any 

6  [69] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

typical  Middle- Western  city,  the  types  of 
houses  that  moderately  well-to-do  men  and 
their  wives  are  likely  to  select  as  genuine 
homes  for  themselves  and  their  families. 

At  about  this  time  Thompson,  along  with 
other  workers  at  the  plant,  was  told  how  he 
could  become  the  owner  of  one  of  the  homes. 
It  was  explained  that  each  house  was  to  be 
disposed  of  at  a  price  covering  what  it  had 
actually  cost,  and  on  terms  which  were  prac- 
tically the  same  as  rent.  In  other  words, 
Thompson,  who  had  been  paying  about  thirty 
dollars  a  month  for  rent  and  getting  nothing 
in  return  but  a  none-too-attractive  roof  over 
his  head  for  the  time  being,  could,  by  paying 
the  same  amount  monthly  as  before,  or  a 
little  more  if  he  wished,  put  himself  in  the 
way  of  owning  a  far  more  attractive  home. 

At  first  Thompson  was  skeptical.  But  some 
of  the  fellows  whom  he  knew  pretty  well  de- 
cided to  buy.  He  was  in  the  habit  of  moving 
frequently,  anyhow;  so  he  joined  them  and 
selected  his  place  in  the  new  allotment. 

Gradually  and  subtly  a  change  took  place 

in  Thompson.    He  began  to  feel  that  he  had 

slightly  greater  responsibilities  than  before. 

He  had  more  reason  than  previously  to  be 

proud  of  his  home,  his  family,  and  himself. 

Paying  for  the  home — each  monthly  instal- 
ls 


LIVING  CONDITIONS 

merit  visibly  reducing  the  amount  between 
him  and  the  final  achievement — gave  him  a 
larger  purpose  in  life  than  he  had  ever  had. 
Little  things  of  this  sort,  multiplied,  make 
character.  Thompson's  backbone  was  stif- 
fened. And  the  tangible  result,  so  far  as  the 
management  of  that  plant  was  concerned,  was 
that  Thompson  began  to  work  six  days  in 
the  week  instead  of  four;  and  he  has  kept  it  up. 

Thompson  is  not  a  hypothetical  individual. 
He  is  a  man  whose  daily  attendance  record 
under  his  real  name  is  on  a  card  in  the  em- 
ployment office  of  the  Firestone  Tire  and 
Rubber  Company,  where  he  works.  Firestone 
Park,  where  he  is  rapidly  finishing  payments 
on  his  home,  has  been  the  visible  means  of 
making  him  a  more  valuable  man  to  himself 
and  his  employer.  He  does  not  feel  any  par- 
ticular sense  of  gratitude  to  his  employer, 
and  his  employer  does  not  expect  him  to. 
What  he  has  accomplished  has  been  the  re- 
sult of  his  own  effort.  As  a  matter  of  sound 
business,  he  was  given  a  chance  to  make  a 
better  man  of  himself,  and  he  availed  himself 
of  the  chance. 

It  would  be  absurd  to  generalize  from  the 
experience  of  Thompson.  He  is  but  one  man, 
placed  under  one  set  of  circumstances.  In- 
telligent employers  are  interested  in  the  oc- 

[711 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

casional  Thompson.  A  general  observation 
may,  however,  be  drawn,  and  this  is  backed 
up  by  daily  experience  in  hundreds  of  con- 
cerns; men  who,  like  Thompson  before  he 
bought  his  house,  have  uncongenial,  slummy, 
or  uncertain  places  of  abode  do  not  make 
the  best  or  the  steadiest  workers.  A  happy 
home  life  conduces  to  stability  and,  other 
things  being  equal,  to  efficiency. 

To  the  extent,  therefore,  that  a  man's  out- 
put may  be  interfered  with  by  improper  living 
conditions,  experience  has  proved  it  wise  for 
the  management  to  give  at  least  some  con- 
sideration to  how  the  workers  live.  How 
far  is  it  possible  and  desirable  to  go  in  helping 
them  to  live  better? 

The  war  lent  special  emphasis  to  the  hous- 
ing problem  in  many  communities.  A  plant 
in  a  small  New  England  city,  for  instance,  was 
manufacturing  munitions  on  a  modest  scale 
with  eight  hundred  employees.  War  contracts 
jumped  the  number  of  workers  to  fifteen 
thousand,  and  at  once  the  problem  of  housing 
became  acute.  The  problem  repeated  itself 
in  scores  of  cities.  Experience  in  meeting  the 
problem  has  taught  some  lessons  of  permanent 
value. 

Of  primary  importance  is  the  consideration 
that  the  worker  who  buys  or  rents  entirely 

[72] 


LIVING  CONDITIONS 

on  his  own  judgment  is  usually  in  the  position 
of  an  inferior  bargainer  as  compared  with  the 
landlord  or  seller.  He  does  not,  typically, 
know  intrinsic  or  neighborhood  values.  He 
may  be  victimized  by  unscrupulous  dealers. 
If  he  buys,  he  may  get  a  house  that  is  far 
larger  than  his  needs,  and  to  meet  the  financial 
burden  he  and  his  wife  may  resort  to  taking 
lodgers,  resulting  probably  in  bad  social  or 
moral  conditions.  In  short,  the  worker  learns 
too  often  that  in  attempting  to  satisfy  a 
fundamental  desire,  the  wish  to  own  his  home, 
he  merely  incurs  unwise  burdens  or  perhaps 
suffers  actual  financial  loss. 

In  Bridgeport,  Connecticut,  for  example, 
speculators  at  the  time  of  the  most  acute 
housing  shortage  preyed  on  renters  system- 
atically. A  group  of  two  or  three  operated 
together  in  this  fashion:  the  first  went  into 
a  given  street  and  bought  a  house.  He,  as 
the  new  owner  and  on  the  plea  of  a  high  pur- 
chase price,  raised  the  rent.  The  tenant 
usually  had  no  recourse  but  to  accept  the 
higher  rent,  because  of  the  shortage  of  houses. 
A  short  time  later  the  buyer  of  the  house 
sold  out — at  a  profit — to  the  second  man 
operating  with  him;  and  the  latter  again 
raised  the  rent!  This  process  was  repeated 
until  the  employers,  out  of  their  larger  re- 

1781 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

sources,  combined  to  give  workers  the  means 
of  having  decent  homes  at  a  reasonable  price. 

If  the  employee  undertakes  to  build,  he 
may  also  be  victimized  by  his  own  imperfect 
judgment  or  taste.  Mr.  Dooley  gives  a  hint 
of  what,  in  slightly  less  exaggerated  form, 
often  happens.  He  is  telling  of  his  friend 
Hogan's  residence  and  says,  "'twas  called  a 
villa  to  distinguish  it  fr'm  a  house.  If  'twas 
a  little  bigger  'tw'u'd  be  big  enough  f'r  th' 
hens,  an'  if  'twas  a  little  smaller  'tw'u'd  be 
small  enough  f'r  a  dog.  It  looked  as  if  'twas 
made  with  a  scroll-saw,  but  Hogan  manny- 
facthered  it  himself  out  iv  a  design  in  th'  pa- 
aper.  *  How  to  make  a  counthry  home  on  wan 
thousan'  dollars.    Puzzle:  find  th'  money." 

Hogan,  if  he  decided  to  sell,  probably  had 
a  hard  time  to  get  his  money  back  on  his  in- 
vestment ! 

One  danger,  of  course,  when  an  employer 
undertakes  directly  to  provide  housing  facili- 
ties for  his  employees,  may  lie  in  the  direction 
of  paternalism.  Men,  by  and  large,  do  not 
want  things  done  for  them.  One  early  housing 
venture,  the  village  of  Pullman,  now  a  part 
of  Chicago,  was  planned  on  supposedly  ideal 
lines.  A  part  of  the  plan  was  to  regulate  in 
many  directions  the  lives  of  the  workers  who 
lived  there.    They  were  not  allowed  to  pur- 

[74] 


LIVING  CONDITIONS 

chase  the  houses,  although  nearly  all  of  the 
material  advantages  that  go  to  make  homes 
decent  and  desirable  were  provided  in  pro- 
fusion. But  it  seemed  to  be  in  the  mind  of 
the  employer  to  make  his  people  happy.  That 
has  been  a  dream  of  Utopian  planners  for 
centuries.  And  it  seems  fairly  certain  that 
there  has  been  accumulated  by  now  a  sufficient 
fund  of  experience  to  prove  that  it  cannot  be 
done.  About  all  the  cheeriest  philanthropist 
can  hope  to  achieve  is  to  provide  his  fellow- 
man  with  some  of  the  opportunities  of  happi- 
ness. It  depends  entirely  on  the  individual 
whether  he  will  take  advantage  of  them. 

When  other  conditions  became  unbearable 
the  workers  who  lived  in  the  charming  vil- 
lage of  Pullman  went  on  a  strike  that  exhibited 
all  the  signs  of  fierce  industrial  warfare. 

There  is  a  wonderfully  delicate  line  between 
paternalism  and  sound  business,  and  perhaps 
nowhere  else  is  management  in  such  danger 
of  overstepping  the  line  as  when  it  ventures 
to  look  into  the  lives  of  workers  outside  of 
business  hours.  Idle,  gossipy  curiosity  is  as 
keenly  resented  by  the  worker  in  overalls  as 
by  any  gentleman  of  fine  feather  and  silver 
buckle. 

At  Firestone  Park  the  houses  have  been 
built  on  a  business  basis,  being  sold  at  a  price 

[75] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

covering  all  costs,  including  the  contractor's 
profit,  but  without  profit  to  the  company. 
There  is  no  restriction  on  the  sale  of  the 
houses.  Any  one  is  privileged  to  buy,  whether 
or  not  a  member  of  the  Firestone  organiza- 
tion. Sales  on  easy  terms  like  rent,  however, 
are  made  only  to  employees.  Building  re- 
strictions compatible  with  a  high-class  neigh- 
borhood have  been  fixed.  A  buyer  may  dis- 
pose of  his  property  at  any  time,  and  he  may 
continue  to  live  in  it  if  he  decides  to  leave  the 
company. 

Since  the  houses  are  contracted  for  in  consid- 
erable numbers,  they  can  be  built  and  sold  at 
a  relatively  low  price.  Several  buyers  have 
already  disposed  of  their  homes  at  a  handsome 
profit,  and  the  news  of  this  has  had  the  effect 
of  convincing  many  workers,  previously  skep- 
tical, of  the  desirability  of  the  investment. 

The  Firestone  Company  financed  the  pro- 
gram at  the  start.  Later,  the  company  placed 
first  mortgages  on  properties  already  built 
and  improved.  These  first  mortgages  the 
buyers  assume.  The  balance  of  the  financing 
the  company  assumes,  securing  the  unpaid 
balance  due  from  each  purchaser  by  means  of 
a  second  mortgage.  The  purchaser  pays  the 
interest  on  both  mortgages.  The  arrange- 
ment has  saved  many  home-buyers  from  the 

[761 


LIVING  CONDITIONS 

extortionate  profits  they  might  otherwise  have 
been  compelled  to  pay  to  unscrupulous  specu- 
lators who  would  have  taken  advantage  of 
their  lack  of  ready  money  or  their  lack  of  in- 
formation on  real-estate  values. 

The  interests  of  the  company  in  the  under- 
taking have  not  been  concealed.  It  frankly 
expects  its  profit  in  the  shape  of  better- 
contented,  more  loyal  and  stable  employees. 
The  advantages  have  become  evident  to  em- 
ployees, and  the  houses  are  eagerly  sought. 
When  a  contract  for  twenty-five  additional 
houses  was  let  recently  ten  were  sold  on  the 
day  that  they  were  put  into  the  hands  of 
salesmen,  sold  on  paper,  on  the  representation 
that  the  houses  would  be  of  such  and  such  a 
sort,  resembling  others  already  constructed, 
and  located  on  specified  lots. 

Of  course  the  investment  by  the  company 
in  a  plan  of  this  sort  is  bound  to  be  fairly 
large,  even  though  it  is  constantly  returning. 
Some  employers,  while  they  desire  to  see  their 
employees  better  housed,  do  not  feel  it  is 
possible  to  make  the  required  investment 
alone.  The  danger  of  seeming  paternalistic, 
too,  has  led  many  to  attack  the  problem  in 
a  different  way — namely,  through  association 
with  other  employers  in  a  common  home- 
building  project.    Of  course  the  choice  of  this 

[771 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

plan  or  another  depends  altogether  on  local 
conditions.  For  instance,  at  Lagrange,  Geor- 
gia, the  Callaway  Mills  are  the  only  plants 
requiring  many  workers.  Mr.  Callaway  has 
therefore  dotted  the  hills  with  neat  little  cot- 
tages, all  constructed  by  his  companies. 

Incidentally,  he  does  not  sell  these  houses, 
but  rents  them  at  a  price  so  low — one  dollar 
a  month  for  each  room  in  the  house — that 
on  a  purely  financial  basis  the  worker  can 
hardly  afford  to  own  his  home.  This  policy 
is  a  common  one  in  Southern  mill  towns. 

In  Kohler,  Wisconsin,  similarly,  the  Kohler 
Company  is  the  only  plant  requiring  a  large 
number  of  workers,  and  the  company,  estab- 
lished several  miles  from  Sheboygan,  the  near- 
est sizable  town,  has  been  forced  to  undertake 
the  large-scale  housing  activities  on  its  own 
account.  An  interesting  phase  of  the  develop- 
ment in  Kohler  is  the  American  Club,  a  build- 
ing provided  for  unmarried  men  and  equipped 
with  splendid  facilities  for  recreation,  amuse- 
ment, and  intellectual  improvement. 

It  is  doubtful  whether  it  is  wise  to  encourage 
employees  to  own  their  homes  too  early.  There 
is  a  danger  that  the  man  has  not  fully  found 
himself.  Until  he  is  reasonably  certain  that 
the  city  in  which  he  is  locating  offers  him  op- 
portunities for  full  development  in  his  chosen 

[78] 


LIVING  CONDITIONS 

line,  he  is  perhaps  chaining  himself  down  and 
cutting  himself  off  from  opportunities  if  he 
buys  a  house.  And  if  that  happens,  the  em- 
ployer will  probably  get  in  him  a  less  efficient 
worker  than  he  otherwise  might.  Prof.  William 
Jewett  Tucker  says  in  this  connection: 

Mobility  is,  in  the  earlier  stages  of  the  development 
of  the  wage-earner,  the  source  of  his  strength.  He  can 
easily  change  to  his  interest.  No  advantage  can  be 
taken  of  his  fixity.  He  can  put  himself,  without  loss, 
into  the  open  market.  He  can  avail  himself  at  once  of 
the  highest  market  price,  provided  his  change  of  place 
does  not  affect  injuriously  his  fellow-workers  in  the 
union,  an  exception  of  growing  concern.1 

At  Bridgeport  the  housing  program  has 
been  planned  with  a  view  to  providing  genuine 
home  facilities  for  workers  in  this  transition 
period  before  they  are  able  to  buy  a  home, 
and  before  they  need  a  home  of  the  size  that 
is  probably  desirable  for  purchase.  Mr.  W. 
H.  Ham,  who  has  directed  this  program,  holds 
that  the  five-  or  six-room  house  is  the  smallest 
that  is  normally  necessary  or  desirable  for  .a 
worker  to  own  in  fee  simple.  A  smaller  house 
is  not  so  readily  marketable,  ordinarily.  And 
even  a  six-room  house  is  often  too  large,  he 
argues,  for  a  man  and  his  wife  when  they  are 
first  married.     They  "rattle  around  in  it" 

1  Public  Mindedness,  the  Rumford  Press,  chap,  xii,  p.  171. 
[791 


COMMON  SENSE  IN  LABOH  MANAGEMENT 

if  they  live  alone;  and  the  tendency  is  for  them 
to  take  lodgers,  who  may  bring  the  undesir- 
able social  or  moral  element  into  their  lives. 

Hence  Mr.  Ham  has  built  many  smaller 
units — of  three  and  four  rooms,  with  some  of 
five  and  six  rooms  for  larger  families.  Owing 
to  high  land  values,  the  smaller  units  are  in 
apartment-houses,  so  designed  that  it  is  pos- 
sible to  get  as  many  as  thirty-one  families 
to  the  acre,  without  any  of  the  shimmy  aspects 
characteristic  of  many  communities  in  which 
the  population  is  dense. 

The  houses  have  been  built  in  an  English 
cottage,  or  colonial,  style  of  architecture, 
carefully  planned  in  all  details  of  arrangement 
both  inside  and  out.  The  purpose  has  been 
to  provide  everything  material  that  goes  to 
make  a  real  home.  Flowers  and  vines,  shrub- 
bery, trees,  playgrounds  for  the  children, 
sunken  garbage  receptacles,  garden-plots,  sun- 
shine for  every  room  at  some  time  during  the 
day,  these  and  many  other  features  have  made 
the  homes  charming  and  desirable,  and  they 
are  yielding  a  small  profit  to  the  corporation. 
There  has  never  been  a  vacancy  in  any  house 
or  apartment,  and  the  demand  for  houses 
under  construction  far  exceeds  the  supply. 

In  Bridgeport  this  work  was  originally 
undertaken  by  a  group  of  fifteen  manufact- 

[80] 


LIVING  CONDITIONS 

urers  associated  for  the  purpose  of  providing 
proper  homes  for  workers.  Later  there  were 
forty  manufacturers  in  the  group.  Still  later 
the  United  States  Housing  Corporation  under- 
took the  direction  of  the  work  as  a  war  meas- 
ure.    Mr.  Ham  says: 

"We  find  in  our  closely  developed  sections 
of  Bridgeport — and  it  is  true  of  many  of  the 
small  cities — a  large  amount  of  wood  con- 
struction in  areas  densely  populated  and  in 
what  is  known  as  the  three-decker  type.  The 
cost  of  land  affects  the  density  of  population. 
If  three  families  are  housed  on  a  lot  fifty  by 
one  hundred  feet,  there  will  be  little  light  on 
the  side  of  the  house  except  in  the  top  story, 
and  little  advantage  from  the  back  yard. 
We  have  developed  a  new  type  of  three-story 
home  with  a  density  double  that  of  the  old 
three-decker  and  have  so  arranged  the  group- 
ing that  there  is  double  the  light  and  air 
space.  This  is  done  by  using  the  two-room 
deep  arrangement  and  by  facing  the  building 
units  on  courts  and  playgrounds." 

And  he  says  further,  speaking  of  results: 
"The  feeling  prevalent  in  Bridgeport  is  that 
a  new  order  of  things  has  begun.  This  will 
go  much  farther  than  the  housing  of  the  middle 
working-class,  for  the  lower-paid  worker  will 
of  necessity  be  allowed  to  take  the  old  house 

[81] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

abandoned  by  his  higher-paid  brother  worker 
when  the  new  houses  are  occupied.  The  op- 
portunity will  be  at  hand  to  revamp  and  bet- 
ter the  unproductive  dark  tenements  for  the 
use  of  the  lower-paid  worker.  Our  rented 
home  units  will  set  a  standard  of  fairness  in 
the  matter  of  relation  of  landlord  and  tenant 
which  will  reach  far.  The  effort  of  the  housing 
movement  has  brought  about  another  startling 
result  which  will  affect  the  future  of  the  ap- 
pearance of  the  town  very  largely.  One  of 
the  biggest  savings-banks  in  Bridgeport  has 
issued  among  its  rules  that  no  loan  shall  be 
made  upon  any  new  house. unless  designed  by 
an  architect.  If  this  rule  becomes  general 
m  our  savings-banks,  we  shall  certainly  have 
different  appearing  cities  ten  years  from  now." 

An  idea  developing  in  Bridgeport  that  is 
likely  to  find  wide  application  elsewhere  aims 
to  enable  employees  to  have  a  financial  in- 
terest in  the  housing  company.  The  plan  is 
that  any  employee  may  buy  shares,  with  the 
purpose  of  gradually  accumulating  enough  to 
make  a  substantial  down-payment  on  a  home. 
A  market  is  to  be  maintained  for  these  shares, 
so  that  they  may  be  negotiated  at  any  time, 
in  case  the  worker  desires  to  leave  the  city, 
or  needs  the  money,  or  wishes  to  buy  a  home. 

The  financial  arrangements  incident  to  the 

182] 


LIVING  CONDITIONS 

purchase  of  a  home  on  long-time  payments 
often  seem  complicated  to  a  worker.  The 
Norton  Company,  which  has  developed  a 
tract  of  one  hundred  and  sixteen  acres  of 
homes  at  Indian  Hill,  near  Worcester,  gives 
to  each  purchaser  a  schedule  showing  the  re- 
quired monthly  payment  and  the  method  of 
figuring.  The  following  is  a  sample  for  a  house 
selling  at  $3,851.50,  on  which  the  purchaser 
has  made  a  down -payment  of  10  per  cent. 

SCHEDULE  OF  PAYMENTS 

Your  total  price  is $3,851 .50 

You  have  made  a  first  payment  of  10  per 

cent 385 . 15 

You  are  borrowing  on  mortgage,  the  bal- 
ance    3,466 .  35 

The  amount  due  in  twelve  years,  secured  by 

time  note,  is 1,000.00 

The  balance  secured  by  demand  note  is .  . .  2,466 .  35 
Your    monthly    payment    to    co-operative 

bank  will  be 5.00 

Your  monthly  interest  during  first  twelve 

years  will  be 14 .  45 

Your  total  monthly  payments  during  first 

twelve  years 19 .  45 

Your  monthly  interest  payment  after  twelve 

years  will  be 10 .  00 

Total  loan .  . .    $3,466 .  35      Demand  loan  .  $2,466 .  35 

Five  per  cent.         173.32      Five  per  cent. .  123.32 

One-twelfth..           14.45       One-twelfth...  10.30 

[83] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

In  erecting  groups  of  houses  they  may  be 
planned  so  badly  that  the  workers  will  not 
feel  that  they  are  genuine  homes,  and  this 
may  only  accentuate  conditions  instead  of 
alleviating  them.  As  Mr.  F.  L.  Olms tead, 
manager  of  the  Town  Planning  Division  of 
the  United  States  Housing  Corporation,  has 
put  it: 

"It  is  possible  to  unify  and  formalize  a 
scheme  by  making  the  houses  so  rigidly  re- 
lated and  balanced  along  the  street  and  across 
the  street  that  the  whole  development  looks 
unpleasantly  like  a  charitable  or  penal  in- 
stitution. It  is  also  possible  by  too  much 
seeking  of  variety  and  picturesque  quality 
in  the  color  and  shape  and  arrangement  of 
the  buildings  to  make -the  development  look 
like  a  piece  of  stage  scenery  and  not  like  the 
dwellings  of  modern  American  citizens. 

"It  is  a  fact,  however,  that  if  the  whole  de- 
velopment is  treated  as  a  business  proposition, 
considering  all  the  aspects  of  site  and  street 
plan  and  utilities  and  houses,  taking  into  ac- 
count the  fair  money  value  of  good  appear- 
ance in  detail  and  arrangement,  and  weighing 
value  and  cost  in  each  case,  the  very  reason- 
ableness of  the  result  will  go  far  to  make  it 
pleasing  to  look  at  as  well  as  inexpensive  to 
build  and  to  operate." 

[84] 


LIVING  CONDITIONS 

Right  housing  is  extraordinarily  important, 
not  only  from  the  point  of  view  of  the  worker's 
efficiency  on  the  job,  but  also  because  of  the 
ultra-radical  ideas  that  may  grow  rapidly 
where  conditions  are  bad.  Mr.  Bonar  Law, 
commenting  on  this,  has  said:  "The  only 
danger  of  anything  approaching  revolution  in 
Great  Britain  was  if  the  conditions  of  life 
became  intolerable,  and,  whatever  the  risk 
from  a  financial  standpoint,  the  housing  prob- 
lem had  to  be  dealt  with." 

In  bad  surroundings  men  may  quickly  lose 
their  self-respect.  In  decent  homes  they  tend 
to  live  up  to  the  best  that  is  in  them.  They 
become  better  citizens  and  better  employees. 
Experience  in  this  country  seems  to  indicate 
that  there  is  little  risk  from  the  financial 
standpoint  where  proper  precautions  are  taken 
to  maintain  values,  though  the  profit  on  the 
transactions  may  be  small  and  the  investment 
may  cover  a  long  period.  The  results  in  many 
cases  are  not  only  desirable — in  some  instances 
conditions  have  been  such  that  failure  to 
undertake  active  improvements  might  result 
disastrously. 

It  is  apparent,  therefore,  that  housing  is  a 
proper  and  desirable  field  for  the  considera- 
tion of  management,  in  those  communities 
where  present  facilities  are  inadequate  or  so 

7  [85] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

bad  as  to  hinder  the  workers  from  developing 
their  full  efficiency.  Of  course,  housing  is  only 
one  of  many  questions  having  to  do  with  the 
lives  of  workers  outside  of  hours.  Some  em- 
ployers have  gone  so  far  as  to  hold  that  they 
have  a  direct  interest  in  practically  every 
activity  that  concerns  the  worker's  health  and 
well-being — his  diet,  his  bank-account,  his 
debts,  even  his  wife's  temper. 

It  is  not  to  be  denied  that  these  and  much 
else  may  have  a  direct  effect  upon  a  worker's 
efficiency.  But  management  cannot  tread 
upon  more  delicate  ground  than  to  interfere 
in  these  matters  in  a  soulless  way.  More  than 
one  excellent  worker  has  flared  up  and  quit 
his  job  when  he  felt  that  somebody  from  the 
management  was  "butting  into"  his  private 
business.  On  the  other  hand,  there  are  times 
when  a  man  or  woman  coming  directly  from 
the  management,  and  possessed  in  high  degree 
of  tact  and  common  sense,  can  be  of  utmost 
help  to  a  worker  who  cannot  see  over  the 
top  of  his  private  problems.  Workers  do  not  re- 
sent such  help,  so  long  as  it  is  offered  in  a  spirit 
of  human  fellowship,  not  in  a  condescending, 
superior,  or  machine-like  way.  Here  is  an  in- 
stance from  the  experience  of  Harry  N.  Clarke:1 

1"Is  This  the  Best  Management  Policy?"  System,  April,  1919, 
p.  605. 

[861 


LIVING  CONDITIONS 

For  several  years  I  was,  among  other  jobs,  employ- 
ment manager  for  a  large  machine-tool  manufacturing 
company.  It  was  my  policy  to  know  the  men  indi- 
vidually as  well  as  I  could.  If  anything  seemed  to 
be  troubling  one  of  them,  I  made  it  my  business  to 
find  out  what. 

I  remember  one  shopman,  who  had  done  good  work, 
but  who  suddenly  began  to  drag  and  make  all  sorts  of 
mistakes.    I  called  him  into  my  office. 

"Jim,"  I  asked,  "is  anybody  sick  at  your  house?" 
"Why,  no,  Clarke!    What  made  you  ask?" 
"  I  noticed  you  weren't  doing  as  good  work  as  usual, 
and  I  thought  you  might  be  worrying  about  some  of 
the  folks." 

"No.  They're  all  very  well." 
"Well,  is  anything  else  bothering  you?" 
I  found  out  that  he  had  got  into  debt.  He  needed 
more  pay,  he  thought,  but  he  could  see  that  the  work 
he  was  doing  wasn't  likely  to  get  it  for  him.  So  things 
looked  dark.  That  night  I  went  out  to  his  house,  and 
together  with  his  wife  we  worked  out  a  schedule  of 
weekly  expenditures  and  savings  which  would  get  him 
out  of  debt.  I  showed  him,  incidentally,  a  simple  way 
of  keeping  accounts. 

He  was  instantly  in  command  of  the  situation  again. 
He  felt  better,  his  work  improved,  and  he  was  soon 
earning  more.    He  is  now  a  foreman. 

Business  men  create  reserves  for  business 
emergencies.  Workers  have  private  emer- 
gencies, and  sometimes  there  is  little  chance 
or  inclination  among  them  to  have  reserves 
ready  on  which  they  can  draw.    It  is  not  diffi- 

[871 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

cult  for  the  management  to  let  it  be  known 
that  workers  can  draw  on  the  company  for 
reasonable  occasions.  And  it  is  plainly  better 
business  to  have  a  worker  whose  mind  is  at 
rest  on  these  matters  than  one  who  is  torn 
with  worry  because  of  financial  obligations 
which  he  does  not  know  how  to  meet.  If  he 
resorts  to  the  usual  loan  agencies,  he  is  pretty 
sure  to  get  in  deeper  than  ever.  David.Brown, 
president  of  the  General  Ice  Delivery  Com- 
pany, of  Detroit,  makes  it  his  personal  busi- 
ness to  see  that  the  minds  of  his  workers  are 
not  upset  by  financial  worries  at  the  time  of 
a  birth,  a  wedding,  a  funeral,  or  other  emer- 
gency. He  loans  money  if  a  man  needs  it, 
with  the  understanding  that  it  may  be  paid 
back  when  convenient.  Never  has  one  dollar 
of  this  money,  loaned  utterly  without  security, 
failed  to  come  back. 

From  all  this  it  might  appear  that  there  is 
no  activity  in  a  worker's  private  life  in  which 
the  management  does  not  have  an  interest. 
And  in  so  far  as  that  activity  may  affect  the 
worker's  productivity  on  the  job,  this  is  com- 
pletely true.  No  line  can  be  drawn  between 
a  worker's  private  life  and  his  business  life 
and  a  sign  erected,  "Management,  stop  here!" 
But  the  twin  qualities  of  tact  and  delicacy, 
and  the  ability  to  sympathize  with  and  help 

[88] 


LIVING  CONDITIONS 

a  fellow-human  being  without  condescension, 
are  as  rare  as  precious  jewels.  The  employer 
who  is  not  self -equipped  with  these  qualities, 
who  is  unable  to  employ  others  who  are 
equipped  with  them,  or  who  cannot  direct 
workers  so  equipped  except  with  the  taint  of 
paternalism  and  meddling,  had  far  better 
draw  a  strict  line  and  put  up  his  sign,  "Keep 
off!" 

I  have  known  of  a  manager  who  made  a 
fetish  of  his  card  records  dealing  with  em- 
ployees. He  had  all  imaginable  kinds  of  little 
facts  jotted  down  on  them,  the  names  of  the 
children,  for  instance,  the  wife's  buying  habits, 
economical  or  extravagant,  the  man's  out-of- 
hours  hobbies — in  short,  as  nearly  a  complete 
history  of  the  worker's  private  life  as  it  was 
possible  to  make  up  by  means  of  an  elaborate 
routine  of  questions,  interviews,  checks,  and 
counter-checks. 

There  is  no  need  to  quarrel  with  such  a 
plan,  or  with  any  other,  so  long  as  it  gets 
results.  It  was  the  method  this  manager  liked, 
and  he  appeared  to  get  good  results  with  it. 
Some  managers  prefer  the  formal  way  of 
working;  others  cut  through  to  the  heart  of 
the  matter  in  other  ways.  The  essential 
point  is  not  to  forget  the  spirit  while  watching 
the  wheels  of  the  machine  go  round. 

[89] 


V 

THE   MONEY    INCENTIVE 

An  unusual  wage  policy — Money  the  only  incentive  offered 
by  many  employers;  its  importance — Peculiarities  of 
the  commodity  called  "labor" — A  simple  case  of  wage- 
bargaining — What  both  employer  and  employee  want 
— Obstacles  in  the  way  of  a  fair  bargain — Just  wages 
are  good  business — What  is  fair  pay  for  "a  man  who 
works  with  his  hands"? — The  piece-rate  basis;  abuse  of 
by  some  employers — The  frequent  unfairness  of  day 
wages — Bonus  plans;  advantages  and  disadvantages 
— Profit-sharing  not  a  substitute  for  wages,  and  often 
undesirable — Stock-sharing — Wages  and  the  cost  of 
living — The  plan  of  the  Oneida  Community,  Ltd. — 
How  an  index  number  of  living  costs  is  compiled — An 
employer's  conclusion  as  to  the  value  of  the  plan. 

/^~\NE  employer  professes  to  have  used  with 
^-^  great  success  the  plan  of  letting  his  em- 
ployees know  that  they  can  earn  more  with 
him  than  anywhere  else  at  similar  work.  His 
stenographer  started  at  three  dollars  a  week, 
for  example,  but  now  receives  eighty  dollars. 
The  same  policy  is  carried  out  with  all  work- 
ers. This  employer  has  never  discharged  an 
employee,  and  he  has  lost  few  by  other  means. 
The  plan  has  excellent  possibilities,  so  long 

[90] 


THE  MONEY  INCENTIVE 

as  he  alone  is  using  it  in  his  immediate  vicinity. 
Let  others  practise  the  same  policy,  however, 
and  soon  a  procession  of  employers  would  be 
chasing  one  another  around  a  hypothetical 
mulberry-bush,  each  trying  to  live  up  to  his 
theory  by  beating  the  others!  Then  nobody 
would  profit,  not  even  the  worker. 

At  any  rate,  this  serves  to  indicate  the  im- 
portance of  the  money  incentive,  which  is  the 
only  incentive  that  a  majority  of  employers 
consciously  consider.  Wages  are  the  prin- 
cipal aspect  of  the  relations  between  employers 
and  employees,  and  it  is  natural  that  they 
should  always  be  so. 

If  labor  were  an  ideal  commodity,  like  sugar 
or  wheat,  the  transaction  between  an  em- 
ployer and  each  employee  would  be  vastly 
simplified.  Demand,  supply,  and  general 
business  conditions  would  regulate  the  price 
to  be  paid.  The  employer  could  look  in  his 
morning  paper  and  find  drill-press  hands,  say, 
"quoted"  at  $4.75.  That  would  settle  the 
matter,  until  a  change  in  the  market  was 
brought  about  by  a  shortage  in  drill-press 
hands,  or  an  increase  in  the  demand  for  them; 
or  until  some  other  factor  upset  the  balance 
responsible  for  the  original  market  price.  Then 
it  would  merely  be  necessary  to  arrive  at  a 
new  figure,  higher  or  lower,  as  the  case  might 

[91] 


COMMON   SENSE   IN   LABOR   MANAGEMENT 

be.  Such  a  condition  would  be  predicated 
on  the  supposition  that  the  employer  could 
buy  so  much  drill-press  service  at  such  and 
such  a  price,  no  matter  whether  the  employee 
happened  to  be  John,  Harry,  or  Bill. 

Labor  is  not  an  ideal  commodity.  It  can- 
not be  bought  by  the  peck  or  gallon.  The 
employer  takes  a  chance  when  he  buys  labor 
that  he  does  not  take  in  buying  any  other 
commodity.  He  may  indeed  get  the  grade 
of  skill  that  he  wants  for  his  money.  But  at 
the  same  time  he  may  get  a  temperament  or 
tongue  that  sets  the  other  workers  in  the 
shop  agog,  or  a  body  so  frail  that  it  cannot 
bear  up  under  the  required  work,  or  a  mind 
that  is  unwilling  to  let  the  hands  furnish  as 
much  work  as  the  employer  thinks  he  is  en- 
titled to  receive  for  the  purchase  price.  In 
short,  he  gets  a  human  being,  with  the  in- 
finite variety  of  feelings,  thoughts,  good  and 
bad  intentions,  ambitions,  weaknesses,  and 
impulses  of  which  human  beings  may  be 
possessed.  These  other  things  that  are  thrown 
in  along  with  the  actual  work  that  the  man 
may  be  able  to  do  make  the  determination  of 
the  purchase  price  of  labor,  or  wages,  exceed- 
ingly complex. 

In  the  simplest  case  the  employer  merely 
wants  to  get  certain  work  done.     It  must  be 

[921 


THE  MONEY  INCENTIVE 

done  by  human  beings,  either  men  or  women. 
The  employer  offers  a  prospective  worker 
nothing  else  than  the  chance  to  do  this  work 
and  be  paid  for  doing  it.  Here,  then,  is  the 
commodity  for  sale — namely,  the  effort  or 
labor  of  the  worker;  and  here  also  is  a  cus- 
tomer, in  the  person  of  the  employer. 

The  farmer  and  the  local  wood-chopper 
used  to  be  able  to  strike  a  pretty  fair  bargain 
under  conditions  resembling  these.  The  wood- 
chopper  knew  about  how  long  it  took  him  to 
cut  a  cord  of  wood,  and  he  had  a  pretty  fair 
idea  of  what  his  efforts  and  time  were  worth 
to  him.  And  the  farmer  knew  about  the  value 
of  a  cord  of  wood;  or  at  least  he  knew  what 
he  was  willing  to  pay  in  order  not  to  have  to 
chop  it  himself.  They  made  a  bargain  on  the 
basis  of  so  much  a  cord,  and  probably  they 
settled  it  in  the  end  by  a  trade:  if  the  farmer 
happened  to  have  a  watch  or  a  shot-gun  that 
the  wood-chopper  thought  he  could  use,  he 
took  that  in  lieu  of  the  money.  The  farmer 
might  think  that  he  had  turned  a  pretty  good 
bargain,  and  the  wood-chopper  was  satisfied. 

With  conditions  as  they  are  in  modern  in- 
dustry, the  bargain  is  not  so  easily  made,  yet 
the  end  desired  is  the  same — a  purchase  price 
that  both  parties  think  fair.  Many  factors 
have  made  the  problem  complex.     For  one 

[93] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

thing,  the  employer  is  not  usually  so  close  to 
the  work  as  the  farmer.  He  cannot  of  his  own 
knowledge  appraise  so  well  what  it  is  worth. 
He  does  not  know  how  long  it  will  take  a  good 
man  to  do  it;  and  he  also  does  not  know  the 
worker  with  whom  he  is  bargaining,  nor 
whether  he  is  likely  to  be  a  good  producer 
or  a  poor  one. 

The  worker,  on  the  other  hand,  unless  he 
happens  to  be  a  member  of  a  union  or  a  trade 
commanding  fairly  standard  wages,  does  not 
know  what  rates  many  other  fellows  receive 
for  similar  work,  or  what  many  other  employ- 
ers pay.  His  information  is  limited.  His 
private  needs  may  be  such  that  he  is  willing 
to  accept  a  lower  figure  for  his  commodity 
than  he  or  most  other  workers  would  normally 
accept.  He  may  find,  after  the  bargain  is  struck, 
too,  that  he  cannot  do  the  work  very  well. 

In  short,  with  these  and  a  score  of  other 
factors  that  enter  into  the  problem,  the  wage 
finally  fixed  is  usually  determined  pretty  much 
by  rule  of  thumb  or  the  squeeze  bargain,  and 
neither  the  employer  nor  the  employee  is 
quite  sure  that  he  is  getting  a  good  deal.  If 
he  is  dealing  with  unorganized  workers,  the 
employer  tends  to  have  an  advantage  in 
making  the  bargain.  If  he  chooses  to  use  that 
advantage,  the  worker  may  not  get  a  fair 

[94] 


THE  MONEY  INCENTIVE 

deal.  Highly  organized  workers,  however, 
may  swing  the  balance  of  power  so  far  in  the 
other  direction  that  the  employer  gets  the 
small  end  of  a  bad  bargain;  which,  if  he  can, 
he  usually  passes  along  to  the  public. 

The  problem  is  not  always  so  simple  as  I 
have  Stated  it.  The  employer  may  offer  the 
worker  more  than  the  mere  chance  to  do  a 
certain  piece  of  work  and  get  paid  for  it.  He 
may  offer  permanent  work,  a  desirable  thing 
in  the  eyes  of  many  workers.  He  may  offer 
opportunities  for  advancement,  a  chance  to 
share  in  the  profits,  the  privilege  of  becoming 
a  part  owner  in  the  business,  or  the  prospect  of 
an  especially  pleasant  and  desirable  place  to 
work.  There  may,  in  fact,  be  any  one  of  a 
great  number  of  special  advantages  quite 
aside  from  wages.  And  while  none  of  these 
things  can  logically  or  justly  be  considered 
by  either  the  employer  or  the  worker  as  a  sub- 
stitute for  wages,  they  do  often  serve  to  con- 
fuse the  issue;  which  is,  that  wages  are  the 
purchase  price  paid  by  the  employer  for  a 
marketable  commodity — labor.  You  some- 
times hear  a  worker  say,  "I'll  be  glad  to  take 
a  smaller  wage  if  there's  a  good  chance  to  get 
ahead."  But  if  the  employer  uses  that  argu- 
ment to  secure  a  worker's  services  at  less  than 
the  fair  wage  for  the  kind  of  work,  he  is  merely 

[95] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

unjust;  and  there  are  very  few  unjust  bargains 
in  wages  that  do  not  react  harmfully  on  the 
business  in  one  way  or  another. 

So  it  appears  that  the  question  of  wages  is 
not  simple.  And  since  the  commodity  that 
workers  sell — effort,  in  terms  of  time — is  the 
very  stuff  of  their  lives,  it  is  only  natural 
that  they  should  resent  bitterly  any  unjust 
bargain  by  which  the  employer  may  take  ad- 
vantage of  their  helplessness  or  ignorance.  The 
resentment  becomes  mutual  if  the  employees 
get  together  in  an  organization  and  force  the 
employer  to  accept  a  bad  bargain. 

Just  wages  are  good  business.  But  the  prob- 
lem of  determining  when  wages  are  just  will 
always  involve  so  large  a  number  of  factors 
that  it  is  fundamentally  important  for  the 
management  to  have  the  complete  confidence 
of  workers  in  its  intentions  to  be  just,  and  to 
take  counsel  with  the  workers  constantly  in 
order  to  determine  in  specific  cases  what  is  just. 

Picture  this  case,  which  is  not  uncommon: 
a  group  of  employees  in  a  shop  department 
have  been  earning  an  average  of  five  dollars 
daily.  The  management  employs  a  time  and 
motion-study  man,  whose  investigations  make 
it  possible  for  each  worker  to  double  his  out- 
put with  about  the  same  effort. 

Shall  the  men  get  double  their  former  wages? 

[96] 


THE  MONEY  INCENTIVE 

Shall  they  get  exactly  the  same  as  before? 
Is  the  employer  to  have  all  the  benefit  of  the 
new  methods?  Are  customers  to  have  some 
of  it?  In  short,  just  where  shall  the  new  wage 
scale  be  fixed,  under  the  changed  conditions 
of  operation? 

I  cite  this  comparatively  simplecase  merely 
to  indicate  the  kind  of  problems  involved  in 
wage  determination.  Often  the  issue  is  not  so 
clearly  defined  even  as  here.  It  shows  the 
great  need  for  a  continuously  operating 
medium  within  the  industry  that  will  enable 
the  employer  and  the  employee  to  meet  on 
common  ground — not  elaborate  machinery 
that  is  set  going  only  with  a  tremendous 
jarring  of  axles  and  creaking  of  joints,  like  the 
union  juggernaut  (and  is  stopped  with  equal 
difficulty),  but  a  simple  process  that  makes 
for  ease  of  adjustment  and  mutual  confidence. 

How  did  the  farmer  and  the  wood-chopper 
manage  it?    Something  like  this,  I  fancy: 

"What  do  you  say  if  we  make  it  fifty  cents 
a  cord,  Jim?"  the  farmer  asked. 

"I've  been  getting  fifty -five  cents  this  year, 
Joe,  and  I  reckon  that's  about  fair." 

"I  reckon  maybe  it  is.    It's  a  bargain!" 

And  both  were  satisfied. 

Modern  industry  cannot  hope,  perhaps,  to 
make  it  always  such  a  simple  and  human 

[97] 


COMMON   SENSE   IN  LABOR  MANAGEMENT 

transaction  as  this.  But  the  principle  in- 
volved— namely,  talking  it  over  in  a  frank  and 
friendly  way  and  arriving  at  a  conclusion  fair  to 
both — must  underlie  any  scheme  of  adjustment 
that  is  not  to  be  more  like  warfare  or  autocracy 
than  peaceful  industry.  And  the  plan  must  in 
some  way  take  cognizance  of  that  inequality 
which  it  was  the  original  aim  of  the  unions  to  cor- 
rect— the  relatively  weak  position  of  the  typical 
employee,  which  tends  to  make  him,  alone,  a 
poor  bargainer.  He  must  be  assured  of  justice 
without  regard  to  his  skill  as  a  logician  or  his 
accumulation  of  this  world's  goods. 

It  is  not  charity  that  urges  this  course.  It 
is  good  business.  If  these  elements  are  not 
preliminary  to  the  contract,  then  the  way  is 
prepared  for  those  feelings  of  distrust  and  dis- 
content that  have  exploded  in  the  past  in 
strikes  and  warfare,  and  have  eaten  into  the 
prosperity  of  industry  in  more  insidious  ways — 
as  through  the  willingness  of  the  worker  to  do  less 
than  he  might,  simply  because  he  has  in  his  heart 
the  feeling  of  injustice.  Bad  relations  with 
employees  are  bad  business.  The  wage  bargain 
is  the  outstanding,  and  very  often  in  the  last 
analysis  the  final,  factor  in  determining  whether 
those  relations  are  to  be  good  or  bad. 

Merely  high  wages  are  not  a  cure — not  with 
money  alone  can  you  buy  loyalty  or  interest 

[98] 


THE  MONEY  INCENTIVE 

in  work.  But  in  no  other  way  can  an  employer 
lay  so  sure  a  foundation  for  good  relations  as 
through  paying  wages  that  announce  them- 
selves to  the  workers  as  being  just. 

In  an  earlier  chapter  I  have  mentioned  the 
thought  of  some  employers  that  a  man  who 
works  with  his  hands  can  only  be  worth 
about  so  much.  This  is  fallacious  and  per- 
nicious. Enough  has  been  said  to  show  that 
the  wage  bargain  at  best  is  based  on  many 
factors,  some  of  them  uncertain.  The  result 
in  any  event  must  be  somewhat  conjectural, 
as  are  even  the  wages  of  management.  In 
one  small  Ohio  city  you  may  find  workers 
riding  to  the  factory  in  expensive  automobiles. 
When  they  get  there  they  strip  to  the  waist 
and  work  in  grime  and  sweat  all  day.  And 
their  pay  -  envelops  indicate  a  wage  rate  of 
eight  and  ten  thousand  dollars  a  year. 

Is  there  anything  illogical  in  this?  These 
men  perform  extraordinarily  delicate  opera- 
tions with  costly  materials.  If  their  hands  or 
eyes  prove  unsteady  at  a  critical  moment, 
hundreds  of  dollars  are  lost.  There  are  com- 
paratively few  executives  in  any  business  who 
have  equal  responsibility. 

It  appears,  then,  that  wages  are  the  pur- 
chase price  of  human  effort — a  commodity 
that  comes  in  a  peculiar  and  highly  delicate 

[99] 


COMMON  SENSE   IN  LABOR  MANAGEMENT 

package.  The  ideal  plan  is  to  buy  so  much 
effort  for  so  much  money.  Why  not,  then, 
strike  a  bargain  on  that  basis? 

The  piece-rate  basis  is  in  theory  the 
ideal  plan  of  paying  wages.  But  it  is  not 
always  practicable  in  view  of  the  distrust  of 
piece  rates  common  among  workers.  Some 
employers  deliberately  cut  the  rates  when 
they  imagine  the  bargain  is  unfair  to  them- 
selves. A  Connecticut  employer  set  hasty 
piece  rates  for  a  certain  kind  of  work.  Im- 
mediately one  worker  showed  that  he  could 
earn  nine  dollars  a  day  at  that  rate,  and  he 
did  it.  It  was  a  non-union  shop.  After  the 
first  pay-day  he  was  out  of  a  job. 

"Nobody  can  earn  that  much  in  my  shop!" 
the  employer  said. 

In  some  cases,  even  when  the  rates  are  set 
fairly  at  the  start,  conditions  under  which 
the  work  is  performed  may  change.  New 
machines  and  processes  are  invented,  and  the 
old  rate  may  become  really  unfair  to  the  em- 
ployer. Often,  under  these  circumstances, 
also,  rates  are  changed  arbitrarily  without 
convincing  the  workers,  who,  as  owners  of 
the  commodity  purchased  by  wages,  are  nat- 
urally entitled  to  consideration  in  fixing  the 
purchase  price.  The  invariable  experience 
of  managers  urges  the  utmost  care  in  setting 

[100] 


THE  MONEY  INCENTIVE 

piece  rates,  and  no  cutting  of  them  so  long  as 
conditions  remain  unchanged. 

If  the  exceptional  worker  can  earn  twenty 
dollars  a  day,  where  is  the  harm?  The  unit 
cost  remains  the  same. 

Day  wages,  under  typical  conditions,  are 
least  satisfactory  of  all,  because  the  employer 
buys  a  pig  in  a  poke.  Jake  may  do  50  per 
cent,  less  work  than  Bill,  and  get  the  same 
wages;  and  the  employer,  if  he  has  no  satis- 
factory measure  of  the  output,  may  not  know 
that  he  is  being  unjust  to  Bill,  or  perhaps 
unfair  to  himself  in  his  bargain  with  Jake. 
Under  typical  conditions,  no  two  men  engaged 
on  identical  tasks  do  the  same  amount  of  work.1 
What  constitutes  "a  good  day's  work"  varies 
with  the  skill,  health,  or  willingness  of  the  men. 
Mr.  William  H.  Leffingwell  gives  an  interesting 
instance  of  this  in  office  work.     He  writes: 

In    one    typewriting    department    the    first    week's 
records  showed  the  following  speeds  attained  in  an  hour: 

Name  Sq.  In. 

Miss  L 113 

"    J 58 

"    K 105 

"    G 61 

"    C 88 

"    W 41 

"    D 155 

1  Cf.  quotation  from  Mr.  Wolf  on  this  point,  p.  143. 
8  [ 101  ] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

These  records  were  all  on  the  same  kind  of  work.  It 
is  evident  that  the  young  lady  who  wrote  an  average  of 
one  hundred  and  fifty-five  square  inches  per  hour  was 
more  than  three  and  one-half  times  as  valuable  as  the 
one  who  wrote  but  forty-one,  but  she  did  not  get  three 
and  one-half  times  as  much  salary.  Before  the  exami- 
nation was  made,  the  head  of  the  department  was  asked 
how  much  work  each  girl  did;  he  was  unable  to  say. 
Each  of  these  two  girls  had  been  with  the  company  for 
upward  of  a  year.  Obviously  an  injustice  was  being 
done  to  some  one.  When  I  first  began  to  take  records 
of  the  work  done  by  typists  I  thought  that  such  records 
were  exceptional,  but  I  am  no  longer  shocked  by  such 
cases  of  evident  mismanagement. 

Now,  assuming  that  these  same  records  prevailed 
for  one  year,  and  assuming  that  each  of  the  girls  got 
$500  a  year,  what  was  the  relative  efficiency  of  each? 
Assuming  one  hundred  square  inches  an  hour  as  the 
standard  efficiency  desired  and  paid  for,  what  did  the 
company  make  or  lose  on  its  typewriting  department? 


Name 

Per  Cent. 
Efficiency 

Value 
Per  Year 

Company's 
Gain               Loss 

Miss  L 

113 

$565 

$  65 

"    J.  .  . 

58 

290 

$210 

"   K... 

105 

525 

25 

"    G... 

61 

305 

195 

"    C... 

88 

480 

20 

"  w... 

41 

205 

295 

"    D... 

.       155 

775 

275 

$365 


$720 
365 


Net  loss  on  department $355 

[102] 


THE  MONEY  INCENTIVE 

That  is  to  say,  the  company  gets  from  the  employees 
$365  which  it  is  not  entitled  to;  the  employees  get  from 
the  company  $720  that  they  did  not  earn.1 

Day  wages,  therefore,  may  often  make  for 
injustice,  unless  it  is  possible  to  standardize 
the  day's  work  so  effectively  that  the  purchase 
price  always  buys  a  fairly  definite  amount  of 
effort. 

Bonus  plans  are  variations  of  the  piece- 
rate  plan  and  the  day  wage.  Sometimes  they 
supplement  one  plan  or  the  other.  They  are 
designed  to  afford  a  more  imperative  stimulus 
to  effort  than  the  simple  piece  rate.  One  fa- 
vorite plan  is  to  start  paying  the  bonus  after 
a  certain  standard  of  output  has  been  reached 
by  the  worker.  Managers  who  favor  bonus 
plans2  usually  place  great  dependence  on  some 
particular  variety  that  tickles  the  mathe- 
matical cells  in  their  brains,  or  with  which 
they  are  able  to  produce  exceptional  results. 

1  Scientific  Office  Management,  William  H.  Leffingwell,  A.  W. 
Shaw  Company,  pp.  142-143. 

2  The  following  references  will  guide  the  reader  who  wishes  to 
study  some  of  the  more  important  bonus  plans  in  detail.  Historically, 
the  Towne  plan  was  one  of  the  earliest.  Halsey  endeavored  to  correct 
some  faults  that  appeared  in  the  Towne  plan.  These  two  plans 
and  Taylor's  plan  are  described  in  Vol.  I  of  Economic  Studies,  pub- 
lished for  the  American  Economic  Association  by  the  Macmillan 
Company;  Emerson's  plan  is  described  in  Efficiency  as  a  Basis  for 
Operation  and  Wages,  chap,  x,  published  by  the  Engineering  Magazine 
Company;  Gantt's  in  the  Transactions  of  the  A.  S.  M.  E.,  Vol.  XXIII, 
p.  341;  and  Leffingwell's  method  for  office  use  in  Scientific  Office 
Management,  chap,  xxiii,  published  by  the  A.  W.  Shaw  Company. 

[103] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

A  disadvantage  of  bonuses  is  that  they 
tend  to  complicate  the  wage  contract.  It 
may  be  difficult  for  the  worker  to  understand 
just  how  his  wage  is  figured.  It  is  also  easier 
for  errors  to  creep  into  the  computation.  The 
worker,  under  any  piece-rate  or  bonus  plan, 
is  naturally  jealous  of  getting  all  that  is  com- 
ing to  him,  and  usually  figures  up  what  he 
is  making  as  he  goes  along.  If  his  figures  fail 
to  correspond  with  those  of  the  employer, 
even  though  the  latter  may  be  entirely  cor- 
rect, there  is  an  opportunity  for  the  growth 
of  distrust.  That  is  the  last  thing  that  should 
enter  into  the  relations  between  the  employer 
and  the  worker. 

Profit-sharing  is  one  form  of  money  in- 
centive that  has  come  and  gone  and  come 
again,  upon  waves  of  uncertain  popularity.  It 
has  been  heralded  more  than  once  as  a  cure- 
all.  Yet  some  concerns  which  have  gone  so 
far  as  to  offer  to  divide  their  profits  fifty- 
fifty  with  employees  have  been  brought  up 
sharp  with  bitter  strikes  threatening  to  wipe 
out  everybody's  share. 

Why  is  this? 

Profit-sharing  is  out  of  the  contract.  It  is 
a  direct  confession  that  the  wages  paid  may 
not  be  entirely  just.  At  the  end  of  the  year 
the  accounts  are  cast  up  and  profits  deter- 

[104] 


THE  MONEY  INCENTIVE 

mined.  They  may  be  very  large.  The  man- 
agement perhaps  feels  a  little  shamefaced 
about  allotting  so  much  to  those  who  merely 
own  the  capital.  It  is  not  entirely  clear  that 
the  management  has  been  the  principal  means 
of  creating  such  large  profits.  It  is  recognized 
that  the  fair  fixing  of  wages  is  at  best  extremely 
difficult.  The  employer  may  conclude  that 
the  workers  deserve  to  share  more  largely 
than  through  the  mere  medium  of  their  wages. 
And  he  may  find  it  good  business  to  share  the 
profits. 

Dangerous,  though,  are  the  lean  years.  No 
matter  with  what  care  the  management  may 
specify  in  advance  that  the  amount  of  the 
profits  and  the  share  of  each  worker  are  bound 
to  vary  from  year  to  year,  yet  any  decided 
reduction  at  the  end  of  a  year  of  business 
depression  is  certain  to  work  a  hardship  and 
cause  grumbling.  The  men  predicate  their 
standard  of  living  upon  the  expected  return 
from  the  year's  work.  They  feel,  quite  nat- 
urally, that  they  are  not  responsible  for  the 
falling  off  in  profits;  yet  they  have  to  suffer 
as  a  result  of  it. 

Again,  the  minor  employees  of  a  business 
ordinarily  have  an  imperfect  perception  of 
the  processes  by  which  profits  are  earned. 
They  seldom  have  a  fair  idea  of  what  they 

[105] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

amount  to.  And  the  initiation  of  a  profit- 
sharing  plan  may  bring  into  their  minds  the 
idea  of  a  vast  reservoir  of  wealth,  of  which 
the  employer  is  giving  them  a  little  by  way 
of  kindness  or  fear. 

"He  might  have  been  paying  us  more  all 
these  years!"  the  reaction  may  be. 

There  have  been  and  are  very  successful 
instances  of  profit-sharing.  The  manager  who 
undertakes  it,  however,  should  clearly  recog- 
nize the  dangers  and  as  far  as  possible  provide 
in  advance  against  them.  In  logic,  there  is  no 
better  reason,  assuming  that  wages  are  just, 
for  sharing  profits  with  workers  than  with  cus- 
tomers or  managers.  All  are  factors  in  profit- 
creation;  and  it  would  require  an  extraor- 
dinarily keen  intelligence  to  determine  with 
accuracy  the  contribution  of  each.  The  follow- 
ing, from  a  work  based  on  a  thoughtful  study 
of  profit-sharing,1  states  a  fundamental  fact: 

If  the  profit-sharing  employer  fails  to  pay  a  fixed 
wage  at  least  as  great  as  that  paid  by  his  non-profit- 
sharing  competitors,  the  resentment  among  his  em- 
ployees caused  by  this  act  may  more  than  counteract 
any  desirable  results  which  might  have  been  secured. 

The  same  authors  sum  up  very  well  when 
they  say: 

1  Profit-sharing,  Its  Principles  and  Practice,  a  collaboration  by 
Arthur  W.  Burritt,  Henry  S.  Dennison,  Edwin  T.  Gay,  Ralph  E. 
Heilinan,  and  Henry  P.  Kendall,  Harper  &  Brothers,  p.  9. 

f  106] 


THE  MONEY  INCENTIVE 

The  complexity  of  modern  industrial  organization, 
the  variety  of  functions  and  tasks  which  are  intrusted 
to  employees  and  of  the  factors  which  are  under  their 
control,  the  difference  in  the  conditions  which  surround 
their  work,  the  diversity  of  results  which  it  is  desired 
that  various  groups  of  employees  shall  accomplish, 
render  it  increasingly  clear  that  there  is  no  one  method 
of  compensation  which  is  uniformly  applicable.  Such 
systems  of  remuneration  must  be  worked  out  as  are  best 
adapted  to  each  particular  business  and  to  each  group 
of  employees  within  the  business.  Under  some  circum- 
stances profit-sharing,  wisely  applied,  will  prove  the 
most  effective  method.  .  .  .  But  under  other  conditions 
other  methods  may  be  better  applicable. 

A  money  incentive  that  is  employed  oc- 
casionally is  the  distribution  of  shares  of  stock 
in  the  company.  Very  often  the  employee  is 
required  to  pay  for  these  shares  out  of  his 
earnings,  but  the  price  is  usually  fixed  at  par 
or  considerably  below  the  market  price.  In 
very  profitable  concerns,  the  stock  of  which 
is  held  at  considerably  above  par,  this  may 
afford  the  worker  a  handsome  investment. 
Often  there  are  restrictions,  such  as  a  clause 
compelling  the  turning  back  of  the  stock  if 
the  employee  leaves,  which  operate  to  render 
the  plan  less  interesting  to  workers.  It  is  a 
type  of  incentive  that  appeals,  as  a  rule,  par- 
ticularly to  employees  of  considerable  in- 
telligence.    From  the  management  point  of 

[107] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

view,  it  may  have  the  advantage  of  giving  the 
worker  a  feeling  of  proprietorship  and  sta- 
bility that  is  perhaps  difficult  to  establish  in 
other  ways. 

One  question  in  the  determination  of  wages 
that  has  been  the  subject  of  considerable 
thought  is  the  relation  of  wages  to  the  cost 
of  living.  It  is  recognized  that  the  dollar 
does  not  always  represent  the  same  purchasing 
power,  as  conditions  send  prices  up  or  down. 
The  attempt  has  been  made  in  some  concerns 
to  readjust  wages  from  week  to  week,  or  month 
to  month,  on  the  basis  of  index  numbers  de- 
signed to  represent  the  fluctuations  in  living 
costs.  The  following,  from  a  booklet  issued 
by  the  Oneida  Community,  Ltd.,  where  the 
plan  has  been  given  a  thorough  trial,  shows 
the  method  of  operation : * 

Our  "High  Cost  of  Living"  plan  was  put  into  effect 
January  1,  1917.  As  a  basis,  we  went  back  to  January, 
1916,  when  a  general  wage  advance  had  placed  our 
employees  (as  all  agreed)  in  a  position  of  sharing  the 
company's  prosperity.  A  careful  estimate  applied  to 
the  living  expenses  of  a  large  number  of  families  of 
differing  size  and  income  indicated  that  the  rise  of 
living  cost  in  our  community  during  1916  was  about 
16  per  cent.    We  therefore  announced: 

1  See  Appendix  II  for  an  explanation  of  the  wage  policy  of  this 
organization. 

11081 


THE  MONEY  INCENTIVE 

1.  That  during  the  war,  and  until  a  period  of  settled 
prices  had  been  reached,  basic  wages  would  be  left  as 
in  January,  1916. 

2.  That  a  separate  envelop  would  be  given  to  each 
employee  containing  an  additional  wage  which,  for 
January,  would  be  equal  to  16  per  cent,  of  the  regular 
wages. 

3.  That  the  wages  in  this  special  envelop  should 
change  each  month  with  the  change  in  the  average  cost 
of  living. 

4.  That  every  twenty-point  change  in  Bradstreet's 
Index  Number  of  about  one  hundred  commodities 
would  be  assumed  as  indicating  a  change  of  1  per  cent, 
in  the  average  cost  of  living,  the  nearest  five  points 
being  considered  equivalent  to  one-quarter  of  1  per 
cent,  in  actual  practice. 

5.  That  each  month  the  latest  Bradstreet  number, 
when  published,  would  be  posted  on  factory  bulletin 
boards,  together  with  the  change  of  wages  indicated 
for  the  following  month  by  this  change  of  index  num- 
ber. .  .  . 

The  economic  result  of  this  plan  in  our  own  industrial 
group  has  been  to  combine  security  and  contentment 
for  employees  with  financial  safety  for  the  institution. 
Factory  operation  during  the  war  has  been  wonder- 
fully benefited  by  the  spirit  of  enthusiastic  co-opera- 
tion engendered,  and  by  the  absence  of  those  disorgan- 
izing and  depressing  periods  of  wage  discussion  and 
wage  crisis  so  inevitable  where  no  automatic  plan  of 
adjustment  is  provided.  Our  employees  have  felt 
that,  however  high  the  price  of  flour  or  potatoes  might 
go,  their  wages  would  increase  to  cover  the  increased 
cost.  ,  .  . 

[109] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

We  are  frequently  asked  if  our  employees  understand 
the  plan  and  the  relation  of  the  index  figures.  Unques- 
tionably many  do  not  know  the  exact  significance  of 
the  index  number.  We  are  sure,  however,  that  all 
understand — 

First — That  changes  in  the  index  number  correspond 
very  closely  to  changes  in  living  expenses.  Two  years' 
personal  experience  has  proved  this  to  them. 

Second — That  the  managers  of  the  company  have 
nothing  whatever  to  do  with  determining  the  index 
figure  and,  hence,  nothing  to  do  with  the  increase  or 
decrease  of  wages. 

It  is  to  be  said  in  conclusion  that  this  "High  Cost 
of  Living"  plan  is  not  designed  to  be  permanent.  It 
has  served  as  a  bridge  to  carry  a  much  more  ambitious 
plan  of  industrial  partnership  across  the  difficult  period 
of  the  war.  Whether  from  it  shall  arise  the  basis  for 
a  permanent  system  of  automatic  wage  adjustment 
belongs  to  the  future. 

Several  index  numbers  are  compiled  and 
published  regularly.  The  following  explains 
how  one  of  them,  Dun's,  is  arrived  at: 

On  the  nearest  business  day  to  the  first  of  every 
month  about  three  hundred  wholesale  quotations  are 
taken,  and  these  are  separately  multiplied  by  a  figure 
determined  upon  as  the  estimated  per-capita  consump- 
tion of  each  of  the  many  commodities  embraced  by 
the  record.  The  results  are  then  grouped  under  seven 
heads,  the  total  of  all  representing  the  actual  cost  of 
a  given  quantity  of  goods  in  the  wholesale  markets 
at  the  specified  dates.  By  adopting  the  per-capita 
consumption  basis  in  computing  the  index  number, 

[110] 


THE  MONEY  INCENTIVE 

no  single  commodity  has  relatively  more  than  its  proper 
weight  in  the  aggregate;  wide  fluctuations,  therefore,  in 
an  article  little  used  do  not  materially  affect  the  total, 
whereas  changes  in  the  great  staples  have  a  larger 
bearing  on  the  general  result.1 

The  methods  used  in  computing  the  several 
index  numbers  vary  considerably,  and  one 
common  complaint  is  that  they  do  not  always 
point  to  the  same  conclusions  about  changes 
in  living  costs.  Probably,  when  reduced  to 
a  common  base,  they  do  correspond  closely. 
But  it  is  doubtful  whether  they  should  be 
taken  as  authoritative  guides  to  all  local  con- 
ditions. Further  considerations  on  the  plan 
are  pointed  out  in  the  following  paragraphs 
from  a  letter  written  to  the  author  by  Mr. 
William  Pitt,  treasurer  of  the  Irving-Pitt 
Manufacturing  Company: 

It  seems  to  me  the  merit  of  the  suggestion  to  apply 
the  commodity  index  number  to  the  pay-roll  lies  in 
the  fact  that  the  commodity  index  number  is  perhaps 
the  best  guide  we  have  to  the  value  of  money,  and  it 
is  useful  to  that  extent  and  no  more.  The  question  of 
what  it  costs  a  workman  to  live  is  irrelevant. 

Wages  depend  upon  productivity  and  not  upon  the 
necessities  of  the  workman.  The  problem  is  to  deter- 
mine the  value  of  what  we  deliver  to  the  workman  in 
payment  for  his  service. 

If  his  wages  were  paid  in  Mexican  money,  the  rate 

1  Dun's  Review,  January  1,  1919. 
[HI] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

of  exchange  would,  of  course,  be  determined  and 
paid  to  him. 

American  money  has  depreciated  in  value.1  The 
commodity  index  number  indicates  to  what  extent. 
Of  course,  it  is  not  absolutely  a  perfect  index,  but 
probably  the  best  we  have  and  in  my  judgment  con- 
stitutes the  best  guide  to  fair  wages  I  have  been  able 
to  find. 

We  use  the  number  principally  to  guide  us  in  the 
adjustment  of  wages,  but  do  not  make  an  exact  appli- 
cation of  it,  for  the  reason  that  our  competitive  con- 
ditions prevent  us  doing  so. 

My  attention  was  first  attracted  to  this  plan  when, 
in  reviewing  our  pay-roll,  I  became  alarmed  at  the 
increases  we  had  made,  and  was  unable  to  determine 
in  my  mind  whether  or  not  the  wages  were  fair. 

My  first  attempt  to  answer  the  question  was  to  com- 
pare our  pay-roll  with  our  sales.  I  found  by  doing  so 
the  pay-roll  had  decreased  in  per  cent,  of  the  sales. 
This  encouraged  me  to  make  further  increases  in  wages. 

My  attention  was  then  drawn  to  the  commodity 
index  number  and  a  comparison  of  the  increases  in 
pay-roll  with  the  increases  in  number  clearly  indicated 
wages  should  be  advanced  still  more.  This  we  did, 
but  they  have  not  yet  been  advanced  to  the  point  in- 
dicated by  the  number,  for,  as  I  previously  stated, 
competitive  conditions  limit  the  extent  to  which  we 
can  go. 

To  sum  up,  wages  are  of  prime  importance 
in  management.  Normally,  other  money  in- 
centives cannot  be  wisely  used  to  supplant 

1  Letter  dated  February  17,  1919. 
[112] 


THE  MONEY  INCENTIVE 

a  just,  fixed  return  to  the  worker,  however 
valuable  they  may  be  as  affording  extra 
stimulus  to  effort.  And  it  is  sound  common 
sense,  and  good  business,  for  the  management 
to  take  counsel  with  the  workers  in  determin- 
ing what  wages  are  just. 


VI 

THE   WORKER'S   SECURITY  IN  THE  JOB 

The  right  to  quit  and  the  right  to  discharge;  results  of 
abuse — Mutual  advantages  in  continuous  employment 
— Modifications  of  the  peremptory  discharge — Foremen 
immediately  responsible  for  high  labor  turnover — 
Evils  of  the  "hire-and-fire"  system — Providing  work 
for  twelve  months  in  the  year — How  an  entire  industry 
overcame  the  seasonal  work  evil — The  Kohler  Company's 
plan — Relation  to  wages — The  employee's  reciprocal 
duty — Pension  plans — Advancing  workers  to  better  jobs. 

HP  HE  right  of  the  worker  to  quit  and  of  the 
employer  to  discharge  is  fundamental  in 
a  free  industry ;  if  one  or  the  other  finds  the 
contract  of  employment  unsatisfactory,  he 
may  terminate  it. 

Indiscriminate  use  of  this  privilege,  however, 
is  commonly  bad  for  both  the  employer  and 
the  employee.  For  the  latter,  it  means  that 
in  the  end  he  will  suffer  through  his  failure 
to  create  a  stable  place  for  himself.  The  fre- 
quent search  for  a  new  job  works  a  direct 
hardship  on  him  and  any  who  may  be  de- 
pendent upon  him.     The  employer,  on  the 

[114] 


THE  WORKERS  SECURITY  IN  THE  JOB 

other  hand,  usually  finds  it  expensive  to  be 
constantly  under  the  necessity  of  training  new 
workers.  The  wear  of  machines  and  waste  of 
materials  by  unskilled  hands,  not  to  mention 
the  inferior  product  that  may  get  to  custom- 
ers, are  likely  to  prove  appreciable  elements 
in  cost. 

Labor  turnover,  as  it  is  called,  has  received 
increasing  attention  in  recent  years.  It  is 
not  uncommon  to  find  a  concern  hiring  ten 
or  even  twelve  thousand  men  in  the  course 
of  a  year,  in  order  to  maintain  an  average 
working  force  of  perhaps  three  or  four 
thousand. 

Both  the  employer  and  the  employee  profit 
when  the  latter,  provided  he  is  reasonably 
skilful,  has  a  sense  of  security  and  a  feeling 
that  his  job  is  permanent.  If  he  is  a  mere 
bird  of  passage,  here  to-day,  and  there  to- 
morrow, he  is  not  likely  to  feel  any  great  con- 
cern about  the  interests  of  the  employer  with 
whom  he  happens  at  the  moment  to  be  asso- 
ciated. Length  of  service  is  valuable  to  the 
employer  not  only  because  the  worker  be- 
comes more  skilful,  but  also  because  the  per- 
manent worker  tends  to  acquire  a  sense  of 
the  identity  of  his  interests  and  those  of  the 
employer.  Wrote  the  President's  Mediation 
Commission,   in   its   report   of   the   disputes 

[1151 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

arising  between  employers  and  employees  in 
the  Arizona  copper  districts : 1 

Any  benefits  conferred  by  migratory  labor  are  wholly 
offset  by  its  costs,  both  economic  and  social.  A  large 
migratory  working  force  is  economically  an  intolerable 
waste.  Socially  it  is  a  disintegrating  element  in  society. 
It  signifies,  too  often,  men  without  responsibility  of 
home  or  home-making,  men  possessed  of  a  feeling  of 
injustice  against  lack  of  continuity  of  employment, 
serving  as  inflammable  material  for  beguiling  agita- 
tors to  work  upon.  This  large  labor  turnover  is  ac- 
cepted too  much  as  the  plagues  of  old,  something 
irremediable.  There  is  only  the  faintest  beginning  of 
realization  that  labor  turnover  is  an  evil  which  can  be 
substantially  reduced  if  not  wholly  eliminated. 

It  is  of  course  but  logical  and  just  that  the 
added  value  in  the  permanent  employee  should 
be  recognized  by  the  employer  in  a  tangible  way. 

When  the  employer  starts  his  business  and 
sees  it  on  a  fair  way  to  success  he  feels  that  he 
has  created  something  permanent.  If  he 
sticks  with  the  business  and  manages  it  well, 
he  is  probably  "fixed  for  life."  Too  often  the 
employee,  lacking  the  initiative  to  start  a 
business  or  the  opportunity  to  exercise  his 
initiative,  does  not  feel  a  similar  sense  of 
security  and  permanence.  That  means,  nine 
times  in  ten,  that  the  management  has  given 
him  no  reason  to  feel  it;  for  the  attitude  of 

1  Report  of  President's  Mediation  Commission  to  the  President 
of  the  United  States,  Government  Printing  Office  (1918),  p.  6. 

[116] 


THE  WORKER'S  SECURITY  IN  THE  JOB 

workers  in  a  plant — those,  at  least,  who  have 
been  employed  long  enough  to  imbibe  the 
plant  atmosphere — is  pretty  surely  a  reflection 
of  what  the  management  has  done  or  failed 
to  do.  Good  intentions,  weakly  acted  upon, 
are  scarcely  better  in  management  than  in- 
tentions deliberately  bad.  It  is  good  business, 
because  it  is  desirable  for  both  the  manage- 
ment and  the  men,  to  enable  workers  to  have 
this  feeling  of  security  and  permanence  in  the 
job  and  the  chance  to  grow.  This  leads 
naturally  to — 

1.  Some  modification  of  the  peremptory 
discharge; 

2.  The  policy  of  providing  work  as  nearly  as 
possible  for  the  full  twelve  months  of  the  year ; 

3.  Taking  the  ends  out  of  blind  alleys — 
that  is,  providing  the  worker  reasonable  chan- 
nels of  growth  into  other  and  bigger  jobs,  if 
he  develops  the  ability. 

Petty  wrangling,  coupled  with  the  nearly 
universal  belief  among  foremen  that  "a  man 
has  got  to  show  he's  boss,"  is  responsible  for 
the  loss  of  many  good  employees.  The  instant 
dismissal  of  the  worker  who  is  at  fault  in  some 
way,  imagined  or  real,  may  become  a  menace 
to  the  business,  and  is  often  an  actual  injustice 
to  the  worker. 

In    a   previous   chapter   I   mentioned    the 

9  [117] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

Filene  arbitration  board,  before  which  a 
worker  can  be  heard  in  case  of  what  he  feels 
is  an  unjust  dismissal.  His  fellow-workers 
hear  both  sides  of  the  case  impartially,  and 
pass  upon  the  justice  of  the  discharge.  The 
mere  fact  that  machinery  of  this  sort  exists 
tends  to  react  favorably  on  the  workers  and 
department  heads.  The  workers  know  that 
so  long  as  they  do  their  work  capably  and  are 
straightforward  in  their  other  relations  with 
the  management,  they  are  assured  of  steady 
employment.  The  executives,  on  the  other 
hand,  are  not  so  likely  to  exercise  the  power 
of  discharge  ruthlessly.  The  plan,  in  short, 
does  not  deny  the  employer  the  power  to  dis- 
charge for  proved  incompetence  and  breach 
of  discipline,  but  it  does  operate  to  prevent 
the  peremptory  and  unfair  use  of  that  power. 
The  immediate  responsibility  for  a  rapid 
rate  of  labor  turnover  usually  lies  with  the 
foreman,  or  minor  boss.  If  he  is  the  sort  of 
man  workers  cannot  get  along  with,  if  he  has 
a  temper  and  "bawls  them  out"  repeatedly, 
if  he  feels  unduly  the  importance  of  his  posi- 
tion and  exerts  his  authority  in  any  of  the 
numerous  ways  known  to  the  martinet  and 
vastly  irritating  to  those  under  him,  men  will 
quit  of  their  own  accord,  even  if  he  fails  to 
discharge  them. 

[118] 


THE  WORKER'S  SECURITY  IN  THE  JOB 

Foremen  occupy  a  strategic  position  in  in- 
dustry. But  the  final  responsibility  for  their 
acts  and  their  attitude  toward  those  under 
them  must  be  placed  higher  up,  with  the  gen- 
eral management,  for  the  ideas,  convictions, 
and  personality  of  the  management  inevitably 
fall  over  the  whole  business  like  the  afternoon 
shadow  of  a  tall  tree. 

It  is  becoming  common  practice  to  limit 
the  right  of  the  foreman  to  discharge  in  an 
arbitrary  way.  Very  often  he  is  permitted 
merely  to  discharge  a  man  from  his  depart- 
ment. If  the  worker  is  competent  and  has 
been  guilty  of  no  serious  breach  of  discipline, 
the  employment  or  personnel  division  may 
place  him  elsewhere.  It  is  natural  for  the 
foreman  trained  in  the  old  school  to  suppose 
that  his  right  to  "hire  and  fire"  is  the  symbol 
of  his  authority  and  the  most  significant  factor 
in  his  exercise  of  it. 

"If  I  can't  fire  a  man,  how  can  I  make  him 
do  what  I  tell  him  to!" 

But  that  is  the  rule  of  the  man  who  governs 
by  fear,  an  individual  politically  known  as 
the  autocrat.  It  is  a  higher  function,  a  bigger 
job  to  win  the  respect  of  workers  and  get  them 
to  co-operate  to  turn  out  the  work  properly 
than  to  crack  a  whip  over  their  heads.  In- 
telligent management  can  make  the  foremen 

[1191 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

realize  that  fact — when  once  the  manager  has 
the  idea  clearly  defined  in  his  own  head.  The 
foreman  is  more  and  more  a  teacher,  less  and 
less  a  whip-cracker. 

The  old  arrangement  bred  evils  of  many 
kinds.  Not  least  was  the  padrone  system, 
under  which  each  worker  was  forced  to  pay 
the  hire-and-fire  foreman  so  much  out  of  his 
weekly  wage  in  order  to  hold  his  job.  Where 
an  unscrupulous  foreman  had  supervision  over 
women,  coupled  with  the  right  of  discharge,  he 
might  demand  his  "share"  in  other  coin. 

A  second  factor  that  tends  to  give  the  worker 
an  adequate  sense  of  security  of  his  job  is  to 
provide  work  as  nearly  as  possible  for  twelve 
months  in  the  year.  Only  the  exceptional 
manager  will  work  on  the  basis  of  expecting 
to  be  "laid  off"  during  temporary  seasons  of 
depression  or  at  dull  seasons  of  the  year. 
Yet  the  worker  farther  down  the  scale,  who 
ordinarily  can  less  well  afford  the  financial 
loss  incident  to  a  lay-off,  is  often  forced  to 
work  on  that  basis.  In  the  typical  case  he 
becomes  thereby  a  less  stable  worker,  more 
open  to  the  insidious  suggestions  of  dissatis- 
faction and  discontent,  and  more  willing  to 
slack  on  the  job  when  he  is  at  work,  with  the 
blind  purpose  of  making  his  employment  last. 

For  these  reasons,  and  because  it  permits 

[120] 


THE  WORKER'S  SECURITY  IN  THE  JOB 

more  constant  use  of  the  investment  in  plant 
and  equipment,  it  is  sound  business  to  make 
an  especial  effort  to  provide  regular  work 
throughout  the  year.  It  is  doubtful  whether 
any  business  is  necessarily  seasonal  to  the 
extent  that  it  cannot  make  adjustments  to 
keep  the  men  and  the  plant  busy  the  whole 
year  through.  True,  the  effort  may  result 
in  far-reaching  modifications  of  the  business. 
In  fact,  it  may  alter  the  traditions  of  an  in- 
dustry. I  quote  the  following  from  a  letter 
written  to  me  by  Mr.  Charles  R.  Frederickson, 
president  of  the  American  Art  Works: 

In  the  early  days  of  the  advertising-calendar  in- 
dustry in  this  country  a  suggestion  to  start  the  sale  of 
calendars  before  October  1st  would  have  been  thought 
ridiculous  both  by  the  calendar  house  and  by  the  buyer. 
The  calendars  were  not  for  use  before  January  1st,  and 
to  the  buyer  three  months  seemed  a  very  long  time  in 
which  to  look  ahead,  figure  on  his  needs,  and  contract 
for  advertising.  And  looking  at  it  from  his  point  of 
view,  which  was  the  important  one,  the  calendar  house 
could  not  but  feel  that  he  was  right. 

This  situation  prevailed  from  the  inception  of  the 
industry  about  thirty  years  ago,  until  perhaps  fifteen 
years  ago.  Of  course,  in'  these  early  days  all  of  the 
houses  carried  a  great  many  imported  pictures,  and 
mounts,  too;  frequently  almost  the  entire  line  was 
made  up  of  imports,  as  they  were  called.  And  it  was 
the  custom  also  with  many  houses  to  carry  the  same 
line  of  subjects  of  their  own  manufacture  year  after 

[121] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

year,  once  in  a  while  adding  a  new  subject  or  two  to 
put^new  life  into  the  efforts  of  salesmen.  There  were  no 
defined  yearly  lines.  Because  of  these  situations  the 
matter  of  stock  was  easily  handled,  and  when  orders 
came  in  they  could  quickly  be  rushed  through. 

When  American  energy  began  to  exert  itself  and  show 
in  American-made  calendars  the  problem  of  prepara- 
tion developed.  Exclusive  art-calendar  lines  were  dif- 
ferent from  the  calendars  of  the  period  that  had  passed. 
They  were  reproductions  of  the  work  of  some  of  the 
best  painters  in  the  country;  they  had  sub-mounts,  and 
triple  mounts,  ribbon-tied  pads,  and  ribbon  hangers. 
To  build  one  of  these  lines  required  a  year  of  prepara- 
tion, selecting  subjects,  commissioning  artists,  design- 
ing styles  of  mounts,  ornamentation,  etc.  It  would 
take  some  time  to  manufacture  them,  therefore.  They 
couldn't  just  be  pulled  down  from  the  shelf,  printed 
and  shipped.  Three  months  in  which  to  sell  and  manu- 
facture them  was  not  enough,  and  about  fifteen  years 
ago  this  selling  period  began  to  lengthen.  Every  year 
there  were  disappointments  to  late  buyers,  who  didn't 
get  their  calendars  on  time — and  sometimes  they 
didn't  get  them  at  all.  The  stock  was  exhausted  before 
their  order  was  reached.  It  was  not  long  until  the  com- 
bination of  circumstances  which  had  formed  made  it 
necessary  for  large  calendar  houses  to  get  together  and 
establish  the  opening  day  of  the  calendar-selling  season 
as  December  26th,  immediately  after  the  buyer  had 
distributed  the  current  year's  calendars. 

It  might  be  thought  that  this  plan  is  a  forced  propo- 
sition, that  the  buyers  of  calendars  are  being  held  up 
by  the  calendar  houses  and  told  they  must  buy  then 
or  not  at  all.  But  this  is  not  the  truth.  Every  calen- 
dar-buyer has  until  perhaps  November  to  make  his 

[122] 


THE  WORKERS  SECURITY  IN  THE  JOB 

selection  and  place  his  order.  But  he  knows  that  only 
a  mighty  poor  business  man  waits  so  long.  As  proof 
that  the  plan  is  satisfactory  to  buyers,  as  it  is  to  manu- 
facturers, the  records  of  calendar  sales  for  the  country 
show  that  one-half  is  actually  booked  in  the  first  three 
months  of  the  year. 

There  is  an  army  of  calendar-buyers  to  one  of  na- 
tional publicity — the  calendar-buyer's  order  is  not  large. 
We  had  a  great  many  people  to  work  on  in  order  to 
bring  about  this  change  in  the  attitude  of  buyers.  It 
has  been  a  matter  of  education,  pure  and  simple. 
Buyers  were  told  why  it  was  to  their  advantage  to  buy 
early.  What  we  have  accomplished  in  changing  our 
business  from  a  radically  seasonable  enterprise  of  a  few 
months  to  one  which  stretches  into  a  full  year,  and  keeps 
our  factories  at  the  top  notch  of  efficiency  every  day 
of  every  week  in  the  month,  can  be  accomplished, 
we  believe,  by  any  other  industry  in  which  the  business 
is  seemingly  seasonable. 

People  can  be  educated  to  buy  when  we  want  them 
to  buy. 

The  result  at  the  American  Art  Works  has 
been  that  the  old  rush  periods  have  in  the  main 
passed,  and  a  smaller  number  of  workers, 
relatively,  is  provided  with  steady  work 
throughout  the  year.  And  with  this  result  go 
all  the  others — better  workmanship,  greater 
contentment,  keener  interest  in  the  work. 

In  some  industries — for  example,  canning — a 
similar  result  seems  difficult  to  achieve.  Yet 
more  than  one  canning  company  has  found  it 

[123] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

possible  to  use  its  equipment  outside  of  the 
season  of  fresh  fruits,  in  packing  or  canning 
dried  vegetables.  Manufacturers  of  window- 
screens  have  turned  to  the  production  of  game- 
tables;  in  both  lines  skill  in  woodworking 
is  required.  Ice  companies  sell  coal  in  the 
winter.  Many  similar  instances  might  be 
cited.1 

The  Kohler  Company  has  built  excep- 
tionally large  warehouses  at  its  Wisconsin 
plant  for  storing  goods  made  during  the  win- 
ter season,  which  is  not  the  season  of  large 
sales.  When  there  is  a  period  of  depression 
men  are  not  arbitrarily  dropped  from  the 
pay-roll,  although  it  is  but  natural  not  to 
engage  so  many  new  men.  When  the  ware- 
houses are  filled  and  full  operations  cannot  be 
maintained,  the  management  reduces  the  out- 
put uniformly  so  that  all  share  the  burden 
of  lessened  income  proportionately. 

The  provision  of  all-year  work  has  a  bearing 
on  the  rate  of  wages.  A  man  who  works  but 
eight  months  in  the  year  must  earn  enough 
in  those  months  to  keep  him  through  his 
period  of  idleness.  His  rate,  therefore,  must 
be  higher  than  it  otherwise  would  be,  in  order 
that  he  may  lay  up  a  surplus. 

1  An  argument  commonly  advanced  in  favor  of  unemployment 
insurance  is  that  it  will  tend  to  force  employers  to  give  consideration 
to  plans  of  this  sort. 

[124] 


THE  WORKER'S  SECURITY  IN  THE  JOB 

In  return  for  all-year  work  the  employee, 
of  course,  owes  a  reciprocal  duty.  It  is  the 
job  of  management  to  make  this  clear  to  him. 
When  a  man  has  found  a  place  in  an  organ- 
ization he  cannot  normally  absent  himself 
from  his  work  without  in  some  degree  lessen- 
ing the  effectiveness  of  the  organization.  He 
is  logically  bound  to  be  regular  in  attendance. 
Some  managers  pay  bonuses  for  promptness 
and  regularity;  but  the  bonus  alone  is  not 
likely  to  prove  generally  effective  unless  there 
is  instilled  in  the  employee  the  feeling  that 
his  particular  work  is  an  integral  part  of  the 
whole,  and  he  is  brought  to  have  a  genuine 
sense  of  responsibility  about  the  importance 
of  being  on  the  job. 

No  worker  can  have  the  necessary  feeling 
of  security  if  it  is  impossible  for  him  to  see 
a  promising  line  of  development  ahead,  if  not 
into  bigger  jobs,  at  least  into  a  state  of  eco- 
nomic safety.  Old-age  pensions  are  commonly 
designed  to  give  the  worker  this  necessary  feel- 
ing of  security.  It  should  be  admitted  frankly 
that  some  employers  have  the  direct  motive 
of  tying  their  employees  to  the  job  by  such 
pensions — a  justifiable  motive  in  itself,  but 
one  that  sometimes  operates  less  effectively 
than  it  might,  because  the  employer  is  often 
not  frank  in  stating  his  purposes. 

[125  1 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

A  pension  plan  is  not  philanthropic  in  any 
sense.  It  is  straight  business.  The  employer 
has  no  interest  in  the  man  past  sixty  or  sixty- 
five,  if  he  is  no  longer  able  to  work,  except 
perhaps  an  occasional  and  casual  feeling  of 
sympathy.  But  he  does  have  an  interest  in 
seeing  that  the  man,  before  he  becomes  too 
old  to  work,  is  able  to  give  his  best  attention 
to  the  job;  that  he  does  not,  in  other  words, 
have  to  devote  part  of  his  working-hours  to 
needless  worry  lest  he  shall  some  day  be  in- 
capacitated and  without  means  of  support. 
Pension  plans  are  of  interest  to  society  at 
large,  of  course,  because  a  man  in  his  own 
home  is  a  better  citizen  and  is  less  expensive 
to  the  state  than  the  one  who  has  to  be  taken 
over  the  hill  to  the  poorhouse  and  provided 
with  a  bed  and  board. 

The  ambitious  worker  should  have  the  op- 
portunity to  grow  into  larger  jobs.  It  is 
astonishing  how  few  employers  clearly  realize 
or  act  on  the  principle  that  their  organization 
is  but  the  sum-total  of  the  effective  abilities 
of  the  people  that  go  to  make  up  the  organiza- 
tion. A  hard-working  employee  who  is  real- 
izing himself  through  growth  in  the  activities 
of  the  organization  is  making  the  organization 
that  much  stronger.  Dead-end  jobs  lead  the 
worker  nowhere,  enable  him  to  express  only 

[126] 


THE  WORKERS  SECURITY  IN  THE  JOB 

a  part  of  his  abilities,  perhaps  stifle  energy 
that  might  be  of  the  utmost  value  to  the 
business. 

It  is  sound  business  to  make  it  easy  for 
men  to  change  jobs  when  they  exhibit  apti- 
tudes that  will  probably  render  their  services 
more  valuable  elsewhere  in  the  organization. 
In  another  chapter  I  have  mentioned  the 
"bull-pen"  in  the  Callaway  mills  in  Georgia, 
by  means  of  which  the  worker  can  get  a  justi- 
fied transfer  to  another  department,  or  even 
to  another  mill.  A  provision  of  this  sort, 
coupled  with  the  opportunity  for  men  to  train 
themselves  for  the  tasks  for  which  they  prove 
themselves  to  be  naturally  fitted,  tends  to 
energize  the  entire  organization. 

An  employer  who  does  not  make  some  ade- 
quate provision  in  all  of  these  directions  for 
this  feeling  of  security  on  the  part  of  each 
worker  really  buys  the  effective  service  of 
only  part  of  each  man.  He  does  buy,  besides 
the  worker's  effort,  a  bundle  of  worries  about 
finances,  the  next  job,  and  the  uncertainties 
of  the  dim  future.  He  does  not  get  a  man 
with  a  mind  measurably  at  rest,  a  man  ready 
to  turn  his  whole  interest  and  effort  to  the 
job  in  hand.  Yet  only  such  a  worker  can  be 
truly  and  permanently  efficient. 

[127] 


VII 


CAN    WORKERS    BE    CRAFTSMEN    INSTEAD    OF 
MACHINES? 

The  creative  impulse  and  joy  in  work — The  employee  who 
is  a  misfit  in  his  job — Can  workers  share  in  planning 
as  well  as  performing? — Giving  responsibility — Training 
ice-wagon  drivers — A  criticism  of  Scientific  Management 
— Is  monotony  inevitable? — The  A.  C.  Gilbert  Com- 
pany's plan — Theory  and  practice  of  Mr.  Robert  B.  Wolf 
— Laziness  not  a  natural  trait — The  incentive  of  pro- 
motion— Creating  interest  in  work  one  of  the  most 
important  problems  of  industry. 

T  M.  W.  TURNER,  the  painter,  is  said 
**  •  to  have  asked  that  his  body,  after  death, 
be  wrapped  for  burial  in  his  magnificent  can- 
vas, "Dido  Building  Carthage."  Into  the 
dust  and  silence  of  the  tomb  he  longed  to 
take  the  memory  of  the  deep  joy  that  he  had 
found  in  the  creation  of  beauty.  It  was  in 
Turner  a  rare  and  magic  development  of  a 
kind  of  joy  that  may  come  in  some  degree 
to  all — the  joy  of  self-expression  through  crea- 
tive activity.  With  some  it  takes  visible 
shape  through  the  materials  of  the  artist,  the 
poet,  or  the  musician;  with  others  through 

[128] 


CRAFTSMEN  AND  MACHINERY 

the  achievement  of  political,  military,  or  social 
purposes;  and  with  still  others  through  the 
tangible  or  intangible  materials  of  industry 
and  commerce,  the  creation  of  organizations, 
the  invention  of  machines  and  products,  the 
overcoming  of  obstacles. 

The  fact  comes  home  to  management  with 
its  true  significance  when  it  is  realized  that 
circumstances  place  large  numbers  of  in- 
dividuals in  industry  in  positions  where  their 
creative  impulses  are  not  allowed  natural 
means  of  expression,  but  are  actually  re- 
pressed. The  balked  energies  that  would 
normally  expend  themselves  in  creative  ac- 
tivity are  directed  into  other  and  often  harmful 
channels. 

Every  man  has  more  inclination  or  ability 
to  do  one  thing  than  any  other.  In  the  com- 
mon talk  of  the  street  and  shop,  we  say  that 
he  has  "a  natural  bent"  for  that  thing.  It 
is  this  which  industry  often  thwarts.  The 
ability  may  not  be  very  great.  But  lack  of 
an  opportunity  to  develop  it  may  make  him 
permanently  dissatisfied.  I  have  heard  of  a 
young  man  who  was  apparently  lost  in  the 
grind  of  a  hopelessly  minor  office  job.  He 
seemed  utterly  to  lack  ambition.  Yet  even 
he,  as  it  turned  out,  had  his  "bent."  A  friend, 
almost  in  despair,  asked  him : 

[129] 


COMMON  SENSE   IN   LABOR  MANAGEMENT 

"Isn't  there  some  one  thing — anything — 
that  you  would  like  to  do  better  than  any- 
body else?" 

"Yes,"  he  replied,  "I  believe  I'd  like  to  be 
the  best  player  of  rag-time  music  in  Chicago!" 

Well,  he  did  it.  And  later  he  went  on  to 
bigger  ambitions.  The  incident  illustrates 
that  these  impulses  to  expression,  of  what- 
ever kind,  if  developed,  bring  out  the  best 
in  a  man.  The  realization  of  these  impulses, 
or  the  effort  in  striving  to  realize  them,  is 
often  more  closely  akin  to  happiness  than  any- 
thing else  in  human  life.  "Where  is  it,  then?" 
asks  Marcus  Aurelius,  referring  to  happiness, 
and  confessing  that  he  has  found  it  "not  in 
syllogisms,  nor  in  wealth,  nor  in  reputation, 
nor  in  enjoyment";  and  the  answer  he  gives 
to  his  own  question  is,  "In  doing  what  man's 
nature  requires."  Aristotle,  similarly,  says 
that  "the  free  exercise  of  any  power,  what- 
ever it  may  be,  is  happiness."  Goethe,  in 
Wilhelm  Meister,  corroborates  this:  "The 
man  who  is  born  with  a  talent  which  he  is 
meant  to  use  finds  his  greatest  happiness  in 
using  it."    Likewise  Montessori: 

The  man  who  loses  sight  of  the  really  big  aim  of  his 
work  is  like  a  child  who  has  been  placed  in  a  class  below 
his  real  standing:  like  a  slave,  he  is  cheated  of  some- 
thing which  is  his  right.    His  dignity  as  a  man  is  re- 

[130  1 


CRAFTSMEN  AND  MACHINERY 

duced  to  the  limits  of  the  dignity  of  a  machine  which 
must  be  oiled  if  it  is  to  be  kept  going,  because  it  does 
not  have  within  itself  the  impulse  of  life.  .  .  .  Every  one 
has  a  special  tendency,  a  special  vocation,  modest, 
perhaps,  but  certainly  useful.  The  system  of  prizes 
may  turn  an  individual  aside  from  his  vocation,  may 
make  him  choose  a  false  road,  for  him  a  vain  one,  and, 
forced  to  follow  it,  the  natural  activity  of  a  human 
being  may  be  warped,  lessened,  even  annihilated.1 

Schopenhauer  follows  out  the  same  thought 
with  this  illustration:  " Imagine  a  man  en- 
dowed with  Herculean  strength  who  is  com- 
pelled by  circumstances  to  follow  a  sedentary 
occupation,  some  minute,  exquisite  work  of 
the  hands,  for  example,  or  to  engage  in  study 
and  mental  labor  demanding  quite  other 
powers,  and  just  those  which  he  has  not  got, 
compelled,  that  is,  to  leave  unused  the  powers 
in  which  he  is  pre-eminently  strong;  a  man 
placed  like  this  will  never  feel  happy  all  his 
life  through.  Even  more  miserable  will  be 
the  lot  of  the  man  with  intellectual  powers  of 
a  very  high  order,  who  has  to  leave  them  un- 
developed and  unemployed,  in  the  pursuit  of 
a  calling  which  does  not  require  them,  some 
bodily  labor,  perhaps,  for  which  his  strength 
is  insufficient."  Finally,  to  be  done  with 
quotations,  Professor  Parker  has  said: 

1  Reprinted  by  permission  from  The  Montessori  Method,  by  Maria 
Montessori.     Copyright,  1912,  by  Frederick  A.  Stokes  Company. 

[131] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

To  be  mentally  active,  to  do  something,  is  instinc- 
tively satisfying.  Much  of  invention  springs  costless 
from  a  mind  thinking  for  the  sheer  joy  of  it.  Organ- 
ization, plans  in  industry,  schemes  for  market  exten- 
sion, visions  of  ways  to  power,  all  agitate  neurones 
in  the  brain  ready  and  anxious  to  give  issue  in  thought.1 

This,  then,  is  the  human  fact.  What  can 
management  do  about  it?  What  is  the  desir- 
able and  profitable  business  policy? 

Since  an  organization  is  merely  the  com- 
bined and  directed  abilities  of  many  indi- 
viduals, it  follows  that,  the  greater  the  con- 
tribution of  each  individual,  the  greater — 
other  things  being  equal — is  the  organization. 
Reduced  to  every-day  terms,  this  means  that 
it  is  good  business  to  encourage  the  develop- 
ment of  natural  aptitude  in  workers,  to  place 
them  where  they  shall  have  the  fullest  oppor- 
tunity to  exercise  those  aptitudes,  and  to  train 
them  to  do  the  most  satisfying  work  of  which 
they  are  capable. 

Taking  workers  out  of  the  wrong  jobs  and 
putting  them  at  congenial  work  often  shows 
immediate  results.  Consider  the  represent- 
ative case  of  a  department-store  clerk — call 
her  Mary.  When  Mary  was  hired  a  girl  was 
needed  in  the  lace  section.  She  went  there. 
She   displayed   a   fair   amount   of  efficiency, 

1  "Motives  in  Economic  Life,"  Carleton  H.  Parker,  The  American 
Economic  Review,  March,  1918. 

[132] 


CRAFTSMEN  AND  MACHINERY 

enough  to  "get  her  by"  the  eye  of  the  man- 
ager, and  in  the  lace  section  she  remained. 

Now  Mary  had  no  particular  fancy  for 
laces.  She  was  naturally  a  domestic  soul. 
Because  she  had  to  spend  her  time  selling  laces, 
she  developed  after  a  while  a  knack  for  gossip 
and  "knocking."  She  was  not  a  very  good 
lace  clerk  at  best,  and  she  became  a  bad  in- 
fluence among  the  other  workers.  Presently 
a  representative  of  the  management  whose 
job  in  this  concern  is  to  know  the  workers, 
and  to  help  them  in  many  unusual  ways,  con- 
sidered the  case  of  Mary.  It  was  suggested 
after  several  talks  that  she  take  a  position  in 
the  kitchenware  section.  She  did  so.  There 
she  quickly  found  her  domestic  interest  or 
imagination  aroused  by  the  pots  and  pans 
among  which  she  worked.  She  became  a 
more  efficient  clerk  than  she  had  ever  been 
in  the  lace  section,  and  she  gradually  forgot 
her  habit  of  "knocking."  She  had  something 
more  interesting  to  do. 

It  is  very  unwise  to  generalize  from  in- 
dividual cases  like  this.  I  do  not  intend  to 
try  it.  The  fact  remains  that  Mary  became  a 
better  worker  in  her  new  environment.  Simi- 
lar cases  might  be  cited  from  the  experience 
of  many  managers.  And  it  seems  self-evident 
that  the  worker  placed   at  congenial   tasks 

10  [133] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

has  taken  a  first  step  toward  happiness  in 
the  job  and  a  pleasant  relation  with  the 
management.  It  helps  to  stimulate  in  him 
the  desire  to  do  the  job  well,  in  and  of  itself, 
because  it  is  a  job  that  he  enjoys;  he  is  not 
inclined  to  adopt  the  attitude,  "I  guess  that 
ought  to  get  by,"  an  attitude  that  results  from 
lack  of  interest. 

There  is  no  such  lack  of  interest  in  the  first 
instinctive  acts  through  which  children  seek 
expression  for  this  creative  impulse,  this  de- 
sire to  do  things.  The  little  girl  with  a  pan 
of  milk  and  an  empty  cup,  almost  too  awkward 
still  to  manage  the  pan,  insists,  "Want  to 
pour  'self!"  She  desires  the  satisfaction  of 
doing  the  thing  with  her  own  hands.  The 
mere  accomplished  fact — having  the  milk  in 
the  cup — affords  her  little  pleasure,  unless 
she  happens  to  be  astonishingly  hungry;  but 
the  feat  of  pouring  the  milk,  a  sturdy  achieve- 
ment for  her  little  hands,  is  a  joy  for  her. 

This  early  instinctive  impulse,  in  itself  one 
of  the  most  valuable  heritages  of  mankind, 
may  tend  to  disappear  or  work  itself  out  in 
destructive  channels,  if  it  is  repressed  or  dis- 
couraged. Assume  that  the  child's  mother 
respects  her  table-linen  more  than  the  de- 
velopment in  her  child  of  the  habit  of  initi- 
ative and  self-help.    She  takes  the  pan  away 

[134  1 


CRAFTSMEN  AND  MACHINERY 

from  the  child  and  pours  the  milk,  thereby 
doing  a  little  toward  hampering  the  develop- 
ment, through  exercise,  of  the  native  desire 
in  the  child  to  do  things  for  itself;  incidentally, 
she  probably  stores  up  trouble,  for  later  she 
may  be  forced  to  scold  the  child  petulantly, 
"Why  don't  you  learn  to  do  things  for  your- 
self!" and  she  will  not  place  the  blame  where 
it  really  belongs,  upon  herself!  Doing  things 
for  itself  is  the  child's  first  step  in  education. 
The  man  who  keeps  on  doing  new  things  for 
himself  through  life  is  never  done  with  his 
education. 

In  industry,  the  manager  who  takes  all  the 
responsibility,  who  feels  that  his  shoulders 
"are  broad  enough,"  who  goes  so  far  as  to 
plan  and  schedule  the  work  entirely  himself, 
and  who  initiates  methods  which  he  insists 
shall  be  rigidly  followed,  patterns  his  conduct 
on  that  of  the  mother  and  gets  from  his  work- 
ers the  same  kind  of  stifled,  ineffectual  results 
that  she  gets  from  the  child. 

The  worker  likes  to  have  some  little  share 
in  the  dream  as  well  as  in  the  performance, 
and  he  normally  does  his  best  work  when  he  is 
given  the  opportunity  to  have  that  share. 
"I'm  responsible  for  that.  I'm  doing  it.  No- 
body has  any  say  about  it  but  me."  This  is 
a  form  of  jealousy,  perhaps,  but  it  may  be  a 

[135] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

symptom  of  excellent  management.  The  man 
who  says  it  feels  a  sense  of  proprietorship  in 
his  job.  He  has  something  to  be  proud  of. 
In  some  shops  the  machine-tenders  have  their 
names  on  their  machines,  just  as  executives 
often  have  their  names  on  their  office  doors. 
It  helps  the  workers  to  see  in  their  work 
something  permanently  desirable.  The  world 
knows  that  John  Czarnik  is  responsible  for 
turret  lathe  No.  2! 

Employers  commonly  favor  the  policy  of 
giving  effective  responsibility  to  department 
heads  and  executives.  A  man  exerts  greater 
energy,  ordinarily,  when  he  knows  that  on 
him  alone  depends  a  given  achievement.  There 
is  no  sound  reason  in  human  nature  why  the 
same  policy  cannot  work  equally  effectively 
with  workers  farther  down  the  scale.  No 
man,  even  the  humblest  workman,  wants  to 
feel  that  he  is  merely  a  cog  in  a  wheel.  His 
place  in  industry  may  be  very  tiny,  but  he 
wants  to  function  completely  as  a  whole  little 
wheel.  That  feeling  of  individual  pride  in 
work,  the  recognition  by  a  man  that  what  he 
is  doing  is  essential  and  important,  is  good 
for  him  and  good  for  the  business. 

Ice-wagon  drivers  in  the  General  Ice  De- 
livery Company,  of  Detroit,  are  given  lecture- 
courses  on  their  work.    They  are  trained  to 

[136] 


CRAFTSMEN  AND  MACHINERY 

realize  the  function  that  ice  plays  in  the  social 
economy  of  a  modern  city — in  the  preserva- 
tion of  foods  in  homes  and  in  transportation 
and  refrigerating  services,  in  hospitals,  and 
in  saving  the  lives  of  babies  and  the  sick. 
They  are  led  to  realize  that  their  work  is 
more  than  a  disagreeable  struggle  between 
muscle  and  heavy  blocks  of  ice,  that  it  is,  in 
fact,  a  significant  social  service.  That  kind  of 
knowledge  tends  to  give  a  man  a  greater  inter- 
est in  his  work,  energizes  him,  enables  him  to 
see  that  he  is  not  bartering  off  what  some  one 
has  called  "the  indispensable  sense  of  human 
dignity";  makes  him,  in  short,  a  better  man 
for  himself  and  therefore  for  his  employer. 

It  is  not  visionary  to  suppose  that  even  a 
garbage-collector  may  be  enabled  by  manage- 
ment to  feel  a  sense  of  dignity  in  doing  his 
task,  provided  the  important  social  function 
that  he  performs  is  explained  to  him,  and  his 
sense  of  a  share  of  responsibility  for  the  health 
of  people  in  his  district  is  developed.  The  out- 
ward symbols  of  dignity  often  help,  too — a 
uniform  or  a  badge. 

A  man  enjoys  doing  work  that  he  can  do 
well.  Hence  the  importance  of  helping  men 
to  find  ways  to  perfect  themselves  in  their 
jobs — training  of  all  sorts.  It  must  be  par- 
ticularly borne  in  mind,  however,  as  with  the 

[137] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

little  child,  that  a  worker  likes  to  do  things 
for  himself;  and  the  same  kind  of  joy  that  the 
employer  finds  in  devising  new  fields  for  busi- 
ness and  testing  new  plans  and  policies  may 
be  shared  in  a  measure  by  the  worker  who 
helps  in  the  development  of  new  and  better 
methods  of  handling  his  job. 

Frederick  W.  Taylor  a  good  many  years 
ago  affirmed  that  the  shop  worker  engaged 
in  a  given  job  cannot  have  the  intelligence  to 
discover  the  best  method  of  doing  it.  This 
may  be  completely  true.  The  worker  may 
not  be  able  himself  to  see  all  or  even  the  ob- 
vious possibilities  for  improvements.  Yet  if 
he  is  set  on  the  track  of  doing  it,  and  his 
interest  in  the  matter  is  pointed  out,  time  and 
motion  study  men  know  that  very  often  he 
will  discover  knacks  that  have  escaped  even 
them.  It  has  been  urged  as  one  of  the  most 
serious  indictments  of  Scientific  Management 
that  it  makes  virtually  impossible  for  the 
worker  a  creative  share  in  any  improvement 
that  may  be  effected.  I  think  there  is  but  little 
truth  in  this  indictment.  Yet  the  fact  of  its 
being  urged  is  a  sufficient  warning  to  managers 
of  the  danger  of  permitting  anything  to  stand 
between  the  worker  and  the  joy  that  comes  with 
devising,  testing,  and  perfecting  a  plan  of  his 
own :  the  danger  if  you  leave  out  of  account  a 

[138] 


CRAFTSMEN  AND  MACHINERY 

fundamental  quality  in  human  nature,  and  seek 
to  substitute  an  incentive,  powerful  enough, 
but  not,  as  a  rule,  humanly  satisfying.  The 
development  of  men  can  never  be  neglected  in 
the  effort  toward  perfect  production. 

It  is  quite  true  that  some  workers  are  so 
constituted  that  they  enjoy  monotonous  rep- 
etitive operations.  Others,  more  alert  phys- 
ically or  mentally,  find  these  operations  merely 
tortuous.  It  is  dangerous  and  unsatisfactory 
to  put  men  of  either  sort  at  the  tasks  for  which 
their  temperaments  unfit  them.  Some  man- 
agers, concluding  that  monotony  is  inevitable 
in  modern  industry,  seek  merely  to  make  the 
money  advantage  to  be  gained  from  this  kind 
of  work  so  attractive  that  workers  will  feel 
well  compensated  for  the  drudgery.  At  best 
this  is  a  temporizing  policy. 

In  the  assembling  of  electric  fans,  the  A.  C. 
Gilbert  Company  permits  men  to  choose  the 
method  they  prefer;  if  they  like,  they  may 
work  on  progressive  assembly,  performing 
simply  one  operation  in  the  complete  chain; 
or  a  man,  if  he  wishes,  may  assemble  the  entire 
fan  himself.  In  this  way  the  creative  or 
craftsmanship  impulse  is  felt  to  be  better 
satisfied  than  if  the  men  were  given  no  choice, 
but  were  forced,  willy-nilly,  to  work  under  the 
monotony  of  progressive  assembly. 

[139] 


COMMON  SENSE   IN  LABOR  MANAGEMENT 

The  employer  has  the  opportunity  to  de- 
velop his  creative  powers  to  the  full  of  his 
ability.  In  mere  justice  to  himself  and  to  the 
best  interests  of  his  business,  he  cannot  afford 
not  to  give  the  same  privilege  to  his  employees, 
or  to  encourage  them  in  che  exerc'se  of  it. 
Indeed,  it  is  a  greater  achievement  to  direct 
successfully  an  enterprise  in  which  the  workers 
are  free  to  express  their  individual  talents 
than  one  in  which  their  natural  impulses  in 
this  direction  are  not  allowed  free  play. 

Probably  no  manager  has  gone  farther  with 
this  thought  in  both  theory  and  practice  than 
Mr.  Robert  B.  Wolf,  whose  principal  work 
has  been  in  the  paper-making  industry.  His 
results  have  been  based  on  the  premise  that 
most  inefficiency — which  is  the  advance  agent 
of  discontent  and  disturbance — is  lack  of  in- 
terest. His  endeavor  is  to  create  interest  in 
the  worker  by  making  him  conscious  of  his 
relationship  to  the  entire  production  process, 
and  by  supplying  him  with  records  and  data 
that  enable  him  to  measure  his  mastery  of 
the  natural  forces  he  is  using. 

At  first  sight  [Wolf  writes1]  it  may  seem  impossible 
to  change  the  monotony  of  routine  work  without  ex- 
tremely radical  changes  in  operating  conditions,  but 
I  know  from  actual  experience  that  it  is  possible  so  to 

1  "Making  Men  Like  Their  Jobs,"  System,  January  and  February, 
1919, 

1140] 


CRAFTSMEN  AND  MACHINERY 

stage  even  routine  work  that  it  will  draw  and  hold  the 
interest  of  the  worker  to  an  absorbing  degree. 

In  other  words,  the  work  ceases  to  be  routine  under 
methods  which  bring  forth  intelligent  conscious  con- 
trol of  the  process  on  the  part  of  the  worker,  when  we 
make  him  master  of  the  machine  instead  of  merely 
furnishing  the  machine  with  organs  of  sense.  ...  In 
many  of  our  industries  the  worker  is  no  longer  a 
mechanic  or  craftsman,  but  performs  merely  a  series 
of  motions  in  which  there  can  be  no  pride  because  in 
the  minds  of  the  men  these  motions  are  only  remotely 
related  to  the  finished  product. 

Wolf  points  out  that  esprit  de  corps  cannot 
be  developed  in  an  organization  by  artificial 
means;  it  can  only  come  "where  the  creative 
power  of  the  individual  is  freest  to  express  his 
real  inner  spirit."  And  he  further  points  out 
that  the  employer  who  prevents  the  worker 
from  using  his  brains  in  his  work,  failing  to 
encourage  creative  work,  not  only  does  not 
gain  one  single  advantage  from  so  doing,  but 
deflects  the  worker's  creative  impulse  into 
channels  that  may  become  destructive. 

Practically  all  the  destructive  forces  at  work  in  the 
industrial  world  to-day,  which  are  manifesting  in  or- 
ganized efforts  to  reduce  production,  are  the  results  of 
this  autocratic  domination  of  the  wills  of  the  workmen 
by  forcing  them  into  an  environment  where  free  self- 
expression  is  an  impossibility. 

By  destructive  forces  I  mean  the  sabotage  methods 
exhibited  by  certain  aspects  of  the  I.  W.  W.  and  Bol- 

[141] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

sheviki  movements.  We  cannot  repress  the  creative 
process  in  the  individual;  we  can  only  deflect  it  into 
useless  channels,  or,  what  is  worse  still,  into  destructive 
channels. 

The  progress  records  which  enable  the  men 
to  know  what  they  are  accomplishing  are 
worked  out  by  Wolf  in  direct  co-operation 
with  the  workers.  They  accept  them,  not 
with  the  thought  that  they  are  being  followed 
up  or  "nagged,"  but  recognizing  that  the 
more  information  they  have  the  better  can 
they  master  their  machines  and  processes. 
"I  believe,"  says  Wolf,  "we  have  failed  to 
recognize  the  curative  properties  of  knowledge 
and  truth.  Just  as  darkness  cannot  exist 
in  the  presence  of  light,  so  ignorance  and  prej- 
udice cannot  exist  when  met  by  frankness 
and  co-operation."  And  it  has  been  his  ex- 
perience that  after  the  men  have  had  some 
records  for  a  while,  they  invariably  want  the 
records  of  additional  factors  that  will  help 
them  in  their  knowledge  and  control  of  the 
work.  Wolf  affirms  the  general  efficacy  of 
this  principle  of  providing  the  men  with  the 
facts : 

For  those  who  may  feel  that  such  records  are  appli- 
cable only  to  a  continuous  process,  let  me  say  that  in 
the  maintenance  and  construction  department,  where 
we    had    about    three    hundred    men    at    work,    we 

[142  1 


CRAFTSMEN  AND  MACHINERY 

kept  every  one  informed  as  to  his  progress  by  giving 
cost  records  on  all  jobs  done,  not  only  labor  costs,  but 
complete  material  costs  as  well. 

These  records  were  furnished  daily,  and  while  we 
did  not  pay  bonuses  of  any  kind,  not  even  to  super- 
intendents or  department  heads,  we  actually  cut  the 
maintenance  material  costs  in  two  by  the  greater 
thought  of  economy  released  in  the  organization.  We 
are  installing  these  job  costs  and  department-cost 
sheets  now  in  our  mills  in  Canada,  for  we  know  that  the 
only  way  to  produce  the  greatest  possible  amount  of 
the  finest  quality  of  paper  at  the  lowest  cost  a  ton  is  to 
give  the  maximum  amount  of  intelligent  information 
to  the  largest  number  of  men. 

From  this  it  is  evident  that  added  compen- 
sation is  not  the  incentive  which  gets  the  in- 
terest of  the  men.  In  fact,  Wolf  explains, 
"we  do  not  pay  a  man  more  money  for  a  good 
record,  but  pay  the  prevailing  union  scale  for 
all  positions  in  our  plants.  These  are  adjusted 
each  spring  by  joint  conferences  with  our  men. 
In  this  way  we  keep  a  proper  wage  balance 
between  the  different  classes  of  work  in  pro- 
portion to  the  skill  required,  and  as  a  conse- 
quence avoid  all  the  innumerable  difficulties 
which  confront  the  piece-work  system,  task 
and  bonus  plan,  and  other  direct-payment 
methods. 

It  is  often  argued  that  it  is  not  right  to  pay  a  good 
man  the  same  rate  as  a  poor  man,  and  to  this  I  abso- 

[143] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

lutely  agree;  but  the  fact  is  that  when  these  progress 
records  are  furnished  to  men,  all  men  in  a  certain  oper- 
ating class  finally  come  to  be  practically  equal  in  per- 
formance and  the  differences  will  be  only  between  the 
amount  of  skill  required  in  each  different  class  of  work. 
And  in  these  classes  there  is  a  difference  in  compensation. 

The  net  result  as  far  as  the  worker  is  con- 
cerned is  that  "the  paper-machine  becomes 
an  instrument  through  which  he  can  express 
the  art  of  paper-making,  and  the  records 
become  organized  facts  available  to  all  and 
gradually  accumulate  to  form  the  basis  of  a 
real  science  of  paper-making." 

Laziness,  the  inclination  to  "  soldier "  on 
the  job,  is  not  a  natural  trait  in  the  majority 
of  workers.  It  is  a  result  that  has  developed 
commonly  in  the  course  of  the  vast  changes 
that  have  taken  place  in  the  methods  of  in- 
dustry, when  management  has  failed  to  under- 
stand the  effect  of  these  changes  on  workers, 
and  has  taken  no  proper  steps  to  counteract 
them. 

Management  deprives  itself  of  an  oppor- 
tunity if  it  seems  in  any  way  to  close  the 
door  against  a  man's  progress  upward  in  his 
work,  even  to  the  very  highest  positions. 
Ambition  is  perhaps  not  a  common  trait. 
And  where  it  does  appear  it  usually  takes  care 
of  itself.    But  it  is  not  only  desirable  that  the 

1144] 


CRAFTSMEN  AND  MACHINERY 

way  upward  should  be  left  open — it  should 
also  be  brought  clearly  into  the  understanding 
of  the  men  that  it  is  open,  and  that  the 
management  takes  pleasure  in  having  men 
step  out  of  their  present  jobs  when  they  can 
wisely  step  into  higher  ones.  It  is  distinctly 
against  the  interests  of  business  and  society 
that  wage-earners  in  any  great  numbers  should 
come  to  believe,  as  John  Mitchell  has  sug- 
gested that  many  of  them  do  believe,  that 
they  must  always  remain  wage-earners.  The 
cost  of  training  men  is  high,  to  be  sure.  But 
there  is  an  excellent  return  on  the  cost  when 
the  job  to  be  filled  has  been  vacated  by  a  man 
going  higher  in  the  organization.  The  serious 
loss  occurs  when  a  trained  man  steps  out  to 
take  a  job  in  another  concern. 

A  manager  who  employs  several  executives 
has  devised  a  plan  whereby  he  adds  a  certain 
number  of  dollars  a  month,  every  month,  to 
the  salary  of  each  man,  provided  he  under- 
takes and  perfects  himself  in  studies  designed 
to  make  him  a  better  executive.  Workers  in 
the  shop  are  not  so  rare  as  skilful  executives. 
For  that  reason  the  desirability  of  providing 
similar  encouragement  for  them  to  advance 
seldom  receives  proportionate  emphasis. 
Nevertheless,  it  is  true  that  the  electrically 
energized  organization  is  one  in  which  every 

[1451 


COMMON  SENSE  IN  LABOH  MANAGEMENT 

man  is  on  the  alert  to  improve  himself  and  is 
able  to  see  the  results  of  his  effort  in  tangible 
progress.  An  organization  goes  ahead  as  the 
men  in  it  go  ahead.  No  sound  logic  can  be 
adduced  to  show  why  the  men  should  be  di- 
vided into  two  classes,  to  whom  the  manage- 
ment says: 

"You,  in  class  1,  are  to  study  and  progress; 
you,  in  class  2,  are  better  off  right  where  you 
are.  We  don't  care  to  have  you  know  more 
than  you  do!" 

In  training  men,  in  winning  their  interest 
in  their  work,  and  in  placing  them  properly, 
results  depend  in  perhaps  greater  measure 
than  is  commonly  realized  on  the  spirit  and 
personality  of  the  management.  The  best 
plan,  poorly  sponsored,  may  fail  tragically. 
It  is  not  uncommon  to  see  a  successful  business 
go  downhill  rapidly  after  the  death  or  with- 
drawal of  one  man  with  a  powerful  personality. 
And  when  all  is  said  and  done,  the  relations 
between  the  management  and  the  men  depend 
in  large  measure  on  the  character  of  the  execu- 
tive charged  with  the  responsibility  of  these 
relations.  Is  he  one  whom  the  workers  dis- 
trust? Then  the  relations  will  almost  surely 
be  bad.  Is  he  one  in  whose  justice  the  workers 
have  confidence?  Then  the  relations  are  likely 
to  be  good.    The  plan,  however  intelligently 

[146] 


CRAFTSMEN  AND  MACHINERY 

devised,  cannot  be  divorced  from  the  man  who 
executes  it. 

It  has  been  my  purpose  in  this  chapter  to 
point  out  that  there  are  some  things  in  in- 
dustrial relations,  as  in  all  walks  of  life,  which 
money  alone  cannot  buy.  Instance  our  sol- 
diers; why  did  they  so  often  value  lightly 
the  medals  awarded  them  for  valor?  It  was, 
I  believe,  because  they  perceived  the  inade- 
quacy of  any  material  thing  to  equal  the 
spiritual  reward  that  came  to  them  in  the 
exaltation  of  the  deed  itself,  the  satisfaction 
in  the  revelation  of  hidden  power,  proved 
courage,  the  skill  to  meet  an  emergency  nobly. 
The  deed  of  valor  would  not  have  been  done 
had  a  medal  been  the  sole  prospective  reward. 
There  is  a  direct  analogy  in  industry. 

Present  industrial  methods  are  on  trial. 
They  cannot  last  if  in  them  inheres  anything 
that  will  render  it  permanently  impossible  for 
great  numbers  of  workers  to  feel  a  sense  of 
satisfaction  in  the  performance  of  their  tasks, 
aside  from  the  material  reward  to  be  gained. 
Men's  spirits  cannot  be  crushed.  It  is  not 
good  for  society.  It  is  not  good  for  business. 
Providing  for  better  business  by  insuring  to 
workers  the  chance  more  fully  to  express 
themselves  through  their  work  is  a  great  task 
and  a  great  opportunity  of  management. 

[1171 


VIII 

WHAT    MAKES    A    GOOD    SUGGESTION     SYSTEM? 

The  importance  of  ideas  in  business  progress — Dangers  in 
not  getting  workers  to  express  themselves — A  suggestion 
system  that  failed — Three  essentials  for  a  successful 
plan — Convincing  workers  that  the  management  is 
open-minded — Directing  ideas  into  constructive  chan- 
nels— How  to  reject  ideas  of  no  value — The  Eastman 
Kodak  Company's  use  of  suggestions — Rewarding  good 
suggestions  fairly. 

TDEAS  are  tne  good  red  blood  of  business, 
provided,  of  course,  they  are  the  right 
kind  of  ideas;  those,  for  example,  which  have 
to  do  with  better  machines,  methods,  or  poli- 
cies. Ideas  evolve  in  the  minds  of  human 
beings  by  some  process  usually  difficult  to 
follow;  and  the  concern  of  management  with 
them  lies  in  the  fact  that  probably  the  typical 
employee  has  about  as  many  ideas,  taking 
one  with  another,  as  the  typical  employer. 
Many  of  the  ideas  of  employees  are,  in  the 
nature  of  things,  bound  to  relate  to  the  em- 
ployer and  the  work.     It  rests  largely  with 

the  management  whether  this  potentially  tre- 

r  148 1 


WHAT  MAKES  A  GOOD  SUGGESTION  SYSTEM? 

mendous  brain  force,  which  can  never  be 
merely  neutral  in  its  effects,  is  directed  into 
constructive  or  destructive  business  channels. 

The  owner  of  a  string  of  department  stores 
tells  me  that  the  best  business  idea  he  ever 
got  came  from  a  delivery-boy,  aged  fourteen. 
That  is  one  of  the  peculiarities  of  ideas.  No 
one  can  safely  prophesy  just  where  they  are 
going  to  turn  up.  It  is  clearly  the  part  of 
wisdom,  therefore,  to  provide  for  their  cordial 
consideration  when  they  do  put  their  heads 
above  the  surface. 

That  is  merely  good  business.  But  there  is 
another  side  to  the  matter.  Management 
needs  to  provide  some  kind  of  outlet  for  the 
dark  ideas  and  gloomy  thoughts  that  tend  to 
brew  and  stew  in  the  mind  of  the  man  who 
does  not  let  the  sunlight  of  intelligent  intellect- 
ual companionship  into  his  soul.  Such  ideas 
and  thoughts,  if  they  fail  to  find  ultimate  ex- 
pression in  hostile  acts  against  the  manage- 
ment, are  pretty  sure  to  "sour  a  man"  on  his 
work  and  prevent  him  from  being — in  the 
fine  sense  of  the  word,  and  probably  in  any 
sense — an  efficient  producer. 

An  interesting  story  could  be  woven  around 
the  trials  of  the  business  suggestion-box. 
Great  numbers  of  employers,  well  aware  of 
the  facts  enumerated,  have  sought  to  garner 

11  [ 149  ] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

in  the  harvest  of  ideas.  The  history  of  one 
of  these  attempts  will  serve  to  indicate  the 
fate  of  many — I  think  perhaps  a  majority. 

The  campaign  for  suggestions  was  started 
in  this  concern  with  the  roll  of  drums,  as  it 
were.  Each  employee  received  a  notice  ex- 
plaining the  company's  desire  to  receive  ideas, 
and  carefully  denning  the  nature  of  sugges- 
tions to  be  submitted.  Cash  prizes  of  $5, 
$2.50,  $1,  and  honorable  mention,  were  prom- 
ised for  the  winners  in  the  contest,  which  ran 
for  four  weeks.  At  the  end  of  that  period  a 
new  contest  started.  The  employees  were 
given  special  forms  on  which  to  write  sugges- 
tions, and  they  were  told  to  deposit  them  in 
a  locked  box  specially  devised  for  the  purpose. 

So  far,  good! 

Then  the  employees  began  to  respond.  It 
turned  out  that  nearly  everybody  had  at 
least  one  suggestion  which  he  thought  should 
reach  the  manager's  intelligence,  some  plan 
which  he  supposed  might  save  the  company 
some  money,  simplify  procedure,  or  increase 
profits.  When  the  first  contest  period  closed 
the  committee  in  charge  of  awards  had  an 
abundance  of  ideas  from  which  to  select  win- 
ners. They  made  their  decisions,  and  on  the 
appointed  day  called  all  the  workers  together 
in  a  large  hall,  where  songs  were  sung,  speeches 

[150] 


WHAT  MAKES  A  GOOD  SUGGESTION  SYSTEM? 

made,  and  finally,  amid  considerable  interest, 
the  prizes  were  handed  to  the  winners. 

This  program  was  repeated  through  three 
or  four  contest  periods.  But,  as  the  day  ap- 
proached for  each  new  award  of  prizes,  the 
committee  found  that  the  number  of  sugges- 
tions of  any  value  dwindled  so  rapidly  that 
they  were  not  worth  the  bother  and  time  spent 
in  getting  them.  The  "suggestion  system" 
silently  passed  into  oblivion. 

Now  what  was  wrong?  Who  was  to  blame? 
Were  the  employees'  minds  such  arid  wastes 
that  no  further  ideas  could  be  coaxed  to  grow 
in  them?  Or  was  the  management  somehow 
at  fault? 

In  this  instance,  as  in  many  similar  cases,  I 
believe  the  blame  rested  wholly  with  the 
management.  In  the  first  place,  the  general 
manager  was  not  seriously  concerned  about 
getting  ideas  from  the  workers  that  he  could 
use.  He  was,  in  the  last  analysis,  fairly  con- 
fident that  he  and  the  executives  associated 
with  him  were  competent  to  run  the  business 
all  right.  The  suggestion  system  he  consid- 
ered as  more  or  less  of  a  game  which  might 
amuse  the  employees. 

As  a  result  of  this  attitude,  no  serious  effort 
was  made  to  apply  the  suggestions,  even 
though  some  of  them  gave  indications  of  con- 

[151] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

structive  thought  on  the  part  of  employees. 
Not  many  workers  can  be  kept  continuously 
interested  in  the  moderately  remote  chance  of 
winning  a  rather  slender  prize,  particularly 
when  the  purpose  of  the  contest  is  so  obviously 
farcical. 

Many  employers  can  relate  an  experience 
closely  resembling  this.  And  the  opinion  of 
most  of  them  seems  to  be  that  the  results 
do  not  warrant  the  effort  and  money  spent  in 
getting  suggestions.  Employers  who  have 
given  the  subject  a  more  careful  trial,  and  have 
thoroughly  studied  methods  that  enable  them 
to  use  to  best  advantage  the  ideas  which 
employees  turn  in,  think  differently.  From 
the  experience  of  these  successful  users  of 
suggestion  plans,  it  seems  fairly  clear  that  it  is 
essential,  if  a  suggestion  system  is  to  be  suc- 
cessful, to  demonstrate  to  employees — 

1.  The  open-mindedness  of  the  manage- 
ment and  the  serious  desire  for  the  ideas  of 
employees. 

2.  The  willingness  to  consider  thoroughly 
the  ideas  that  are  offered,  no  matter  whether 
they  seem  good  or  bad  at  first  glance,  and  the 
intention  in  any  case  to  let  the  employee 
know  the  decision  and  the  reason  for  it. 

3.  The  desire  to  reward  fairly  the  man  who 
makes  the  suggestion,  if  there  is  any  value  in  it. 

[152] 


WHAT  MAKES  A  GOOD  SUGGESTION  SYSTEM? 

The  best  proof  that  the  management  wants 
suggestions  is,  of  course,  to  use  those  it  gets, 
when  they  are  worth  using.  When  that  is 
done  the  news  of  it  spreads  rapidly  through 
an  organization.  It  gives  the  worker  a  genu- 
ine feeling  of  pride  to  point  to  a  machine  or 
method  and  say,  "That's  my  idea!"  And  if 
he  is  rewarded  fairly,  it  is  an  incentive  to 
others  to  turn  in  their  suggestions  also.  These 
may  seem  to  be  little  things.  But  good 
management,  after  all,  is  the  sum  of  many 
little  things  rightly  handled. 

Merely  to  ask  employees  for  suggestions 
may  have  the  same  effect  as  asking  a  small 
boy  to  define  the  moon.  He  has  no  definition. 
So  far  as  he  is  aware,  it  is  just  a  moon!  A 
hint  as  to  the  kind  of  suggestions  wanted 
often  proves  valuable  in  helping  employees 
to  concentrate  on  the  problem  where  they 
are  most  likely  to  be  of  help.  A  New  York 
company  which  has  been  unusually  successful 
in  developing  the  habit  of  suggestions  goes  to 
considerable  pains  to  let  its  employees  know 
what  a  good  suggestion  really  is.  When,  for 
example,  a  worker  suggested  an  improved 
part  for  a  machine,  which  was  adopted,  the 
manager  had  photographs  of  both  the  old  and 
new  plan  made  and  mounted  on  cardboard, 
with  a  full  explanation  of  the  improvement. 

[153] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

Accompanying  it  was  a  brief  text  explaining 
that  ideas  of  this  sort  were  the  kind  which  the 
management  especially  wished  to  encourage. 

In  other  words,  the  employee  was  not  asked 
for  "suggestions" — a  large  word,  the  exact 
meaning  of  which  he  might  fail  to  compre- 
hend; but  he  was  shown  an  example  of  a  sug- 
gestion and  told,  "Maybe  there's  something 
about  your  work  on  which  you  can  suggest 
improvements  in  somewhat  the  same  way." 
Unless  there  is  concrete,  constructive  direction 
of  the  worker's  thought,  some  of  them  are 
likely  to  recommend,  as  one  man  did,  "make 
the  truckers  load  faster."  He  happened  to 
be  a  machine-tender  with  plenty  of  oppor- 
tunity to  observe  the  foibles  of  truckers!  His 
recommendation  was  not  utterly  devoid  of 
value,  for  it  suggested  a  direction  for  possible 
investigation;  but  it  did  fall  short  in  all  the 
elements  that  make  a  suggestion  really  valu- 
able to  the  management. 

In  any  plant  where  the  manager  has  suc- 
ceeded in  convincing  the  workers  that  he 
welcomes  suggestions,  and  treats  them  fairly, 
there  is  usually  no  lack  of  them.  And  here 
enters  danger — namely,  the  risk  of  slighting 
suggestions,  or  turning  them  down  without 
letting  the  originators  know  the  real  reasons 
for  doing  so.    This  is  also  an  opportunity.    If 

[154] 


WHAT  MAKES  A  GOOD  SUGGESTION  SYSTEM? 

a  man  has  a  suggestion  rejected,  and  he  knows 
why  it  is  rejected,  he  is  in  a  better  position 
than  before  to  avoid  further  bad  suggestions. 

The  danger  is  delicate  and  common.  In 
business  two  minds  or  two  groups  of  minds 
are  constantly  meeting,  one  of  which  says, 
"Let's  do  this!"  while  the  other  insists,  "Let's 
do  that!"  Given  equal  force  of  character,  lung 
power,  and  logic,  the  two  sides  quickly  reach 
an  impasse.  It  is  usually  true,  however,  and 
this  is  commonly  the  case  as  between  the 
management  and  the  men,  that  one  side  has 
a  subtle  weapon,  reserved  for  finally  putting 
an  end  to  the  discussion.  That  weapon  is 
authority.  The  boss  "has  the  say."  In  the 
last  analysis  he  depends  on  his  judgment  for 
making  his  decision  "yes"  or  "no";  and 
always,  when  he  says  "no"  he  runs  the  risk 
of  seeming  arbitrary,  thereby  arousing  re- 
sentment in  the  mind  of  the  employee  or 
destroying  some  of  his  initiative. 

The  best  way  to  say  "no,"  as  a  rule,  is  to 
give  all  the  reasons  with  complete  frankness. 
During  the  hottest  period  of  the  summer  of 
1918  a  battery  of  new  machines  for  use  on 
some  government  work  was  being  installed 
in  an  Ohio  factory.  The  manufacturers  of 
the  machines  had  been  unable  to  develop  a 
self-feed  attachment.     It  was  imperative  to 

[155] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

deliver  the  product  to  the  government.  The 
needed  capacity  could  practically  be  reached 
by  hand  feeding;  but  this  required  an  opera- 
tive on  each  machine,  and  men  were  scarce. 

One  employee,  not  a  mechanic  by  trade,  but 
a  man  of  unusual  ability  in  that  direction, 
was  positive  he  could  develop  an  automatic 
feed,  and  he  set  himself  to  the  task  of  doing 
so,  working  incessantly  through  the  days  and 
far  into  the  hot  nights.  Finally,  late  one 
evening,  the  manager  was  called  to  the  factory 
by  telephone  to  see  a  practical  demonstration 
of  the  device.  It  functioned,  and  it  functioned 
well,  but  the  manager  could  see  where  there 
was  a  chance  that  it  might  frequently  throw 
the  machines  out  of  working  order.  The  loss 
of  time  from  this  cause,  he  feared,  might  re- 
sult in  a  smaller  weekly  production  from  each 
machine  than  through  the  method  of  hand- 
feeding.  Delivery  dates  were  imperative. 
Since  they  could  just  about  be  met  by  the 
hand-feeding  process,  the  manager,  after  thor- 
oughly considering  the  advantages  and  dis- 
advantages of  the  two  methods,  felt  compelled 
to  reject  the  feeding  device. 

It  was  a  crushing  blow  to  the  man,  whose 
creative  genius  had  developed  a  novel  and 
workable  attachment.  Money  alone  could 
not  overcome  his  disappointment.    The  case 

[156] 


WHAT  MAKES  A  GOOD  SUGGESTION  SYSTEM? 

naturally  had  to  be  handled  with  a  little  more 
than  usual  care.    Says  the  manager: 

"I  did  not,  however,  find  it  difficult  to  con- 
vince our  employee  that,  in  demonstrating 
his  ability  along  lines  which  were  bound  to 
be  useful  to  us  in  the  future,  he  had  in  reality 
accomplished  a  great  deal  for  himself,  and 
that  the  time  and  energy  he  had  thrown  into 
this  thing  had  not  by  any  means  been  wasted." 

The  Eastman  Kodak  Company  uses  an 
analysis  sheet  by  means  of  which  those  re- 
sponsible for  looking  into  the  suggestions  of 
workers  measure  the  cost  of  changes  against 
the  savings  they  may  effect.  The  worker  is 
taken  into  the  confidence  of  the  management, 
and  if  an  idea  cannot  be  used  with  practical 
results,  the  reasons  as  shown  by  the  analysis 
sheet  are  fully  explained  to  him.  Mr.  A. 
Stuber,  of  this  company,  writes  to  me: 

The  answer  to  the  suggestion  which  is  not  approved 
can,  if  not  worded  properly,  discourage  the  suggestor 
so  that  no  further  suggestions  will  be  received  from 
him.  Or,  if  proper  advertising  thought  is  given  to  the 
answer,  he  can  be  stimulated  to  again  offer  another 
suggestion.  I  believe  that  this  point  is  one  of  the  main 
factors  in  the  success  or  failure  of  a  suggestion  system. 

There  are  several  other  big  points  in  the  suggestion 
system  which  up  to  the  present  time  have  been  over- 
looked, and  which,  I  believe,  are  of  considerable  benefit 
to  the  management.    One  of  these  which  I  am  experi- 

1157} 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

meriting  with  and  watching  very  closely  is  using  the 
suggestion  system  as  a  means  of  improving  the  so-called 
human  relation  in  industry. 

I  find  that  the  average  employee  when  in  my  office 
for  the  purpose  of  discussing  one  of  his  suggestions 
is  in  a  better  frame  of  mind  to  tell  me  his  troubles  and 
the  troubles  which  other  employees  are  experiencing 
than  when  brought  to  my  office  for  any  other  purpose. 
By  tactful  questioning  I  am  able  to  get  more  informa- 
tion on  actual  conditions  in  the  shop  than  at  any  other 
time.  I  am  also  able  to  take  some  of  those  grievances 
which  he  believes  very  serious  and  show  him  that  he  is 
wrong. 

At  this  time,  if  properly  handled,  the  management 
can  establish  a  real  get-together  spirit  with  these  em- 
ployees, and  mutual  understanding  and  trust  can  be 
developed,  which  is  of  considerable  benefit  to  both  the 
employee  and  the  management. 

The  reward  that  the  worker  receives  for  a 
good  suggestion  should  justly  have  some  re- 
lation to  its  dollars-and-cents  value  to  the 
company.  A  man  who  turns  in  an  idea  does 
something  that  can  hardly  be  recompensed  in 
his  regular  wage.  If  his  idea  is  for  machinery 
or  equipment  that  will  save  the  company 
perhaps  hundreds  or  even  thousands  of  dollars 
— there  have  been  such  suggestions! — he  can 
hardly,  in  the  interest  of  justice,  be  fairly 
rewarded  by  the  mere  payment  of  a  hard- 
and-fast  sum,  such  as  $5  or  $10,  or  even  $25 
or  $50. 

[158] 


WHAT  MAKES  A  GOOD  SUGGESTION  SYSTEM? 

His  reward  may  not  be  directly  in  money 
at  all.  It  may  be  wisest  to  give  him  a  chance 
at  a  bigger  job,  or  the  opportunity  and  facili- 
ties to  pursue  a  course  of  study  to  fit  himself 
for  larger  tasks.  One  employer,  rewarding 
an  employee  who  had  made  an  especially 
valuable  suggestion,  handed  him  a  check  for 
a  little  better  than  a  thousand  dollars,  to  clear 
the  mortgage  on  his  home! 

The  co-operation  that  the  company  is  forced 
to  give  in  perfecting  an  idea  may  also  be  an 
element  in  the  consideration  of  the  just  re- 
ward. Often  a  man  will  have  in  his  head  the 
germ  of  an  idea  which  he  has  neither  the  skill 
nor  the  facilities  to  perfect.  When  other  heads 
combine  with  his  to  attain  the  final  result 
he  can  readily  be  made  to  realize  that  his  re- 
ward is  bound  not  to  be  as  great  as  if,  with  his 
own  resources,  he  developed  the  idea  to  its 
final  shape. 

Men  are  inclined  to  be  jealous  of  their  ideas. 
This  is  natural.  A  brief  experience  in  a  few 
plants  usually  teaches  a  worker  how  easy  it 
may  be  for  one  man — a  foreman  or  sub- 
executive,  perhaps,  or  even  those  in  higher 
authority — to  appropriate  his  thought  and 
seek  to  take  the  full  credit.  That  is  why  it  is 
important,  if  a  suggestion  plan  is  to  succeed, 
to  make  provision  so  that  every  man's  sug- 

[159] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

gestion  will  reach  those  fully  qualified  and 
willing  to  place  full  credit  where  credit  is  due. 
Most  suggestion-boxes  need  a  padlock  with 
a  key  in  the  hands  of  the  man  designated  as 
the  representative  of  the  management  to  con- 
sider the  suggestion. 

But  no  key  will  unlock  the  mind  of  even  a 
general  manager  if  he  persists  in  perveres 
and  arbitrary  decisions.  Such  decisions  will 
quickly  ruin  the  best-laid  plans  for  harvesting 
the  ideas  of  workers.  In  one  plant  a  newly 
employed  department  head  proposed  to  the 
general  superintendent  a  plan  for  a  suggestion 
system.  The  superintendent  at  first  inclined 
favorably  to  the  plan.  But  a  day  or  so  later 
he  told  the  department  head  he  had  decided 
against  it,  "for  reasons  which  I  cannot  dis- 
cuss with  you"!  Imagine  how  speedily  that 
man,  who  could  not  or  would  not  take 
the  time  to  give  his  reasons  to  a  responsi- 
ble department  head,  would  have  spoiled 
the  chances  of  any  suggestion  system,  had 
it  been  tried! 

So  much  for  encouraging  the  workers  to 
submit  their  constructive  ideas.  It  is  safe  to 
say  that  when  the  minds  of  workers  are  turned 
in  the  direction  of  building  up  there  is  not 
much  room  left  for  those  ideas  which  tend  to 
tear  down  and  destroy,  ideas  that  often  lie 

[160] 


WHAT  MAKES  A  GOOD  SUGGESTION  SYSTEM? 

hidden,  making  the  workers  disgruntled  and 
gloomy  of  temperament,  inefficient  of  hand, 
and  fertile  soil  for  the  seeds  of  unrest,  dissatis- 
faction, or  industrial  strife.  Such  ideas  are 
seldom  expressed  except  in  snarls. 


IX 

THE   EMPLOYER  AND   THE   UNION 

One  way  of  dealing  with  unions:  at  a  Georgia  factory — 
Hart,  Schaffner  &  Marx  and  the  preferential  shop — 
A  shop  that  is  neither  "open"  nor  "closed" — The  old 
attitude  of  employers  toward  unions — The  function  of 
the  union — Unionism  not  completely  effective — Indus- 
trial justice  to  be  assured  by  co-operation  of  all  con- 
cerned. 

DICTURE  a  group  of  cotton-spinners 
gathered  around  a  speaker  who  has 
mounted  a  box,  the  better  to  be  heard.  He  is 
a  union  organizer,  trying  to  convince  the 
group  before  him  that  it  is  their  interest  to 
join  the  union.  He  has  said  just  enough  to 
enable  the  men  to  catch  the  drift  and  purpose 
of  his  argument,  when  one  of  them,  a  lantern- 
jawed  athlete  who  spent  the  first  twenty  years 
of  his  life  in  the  Georgia  hills,  speaks  for  the 
crowd : 

"I  reckon  we  don't  care  much  to  be  bothered 
with  your  kind  o'  talk,"  he  says.  "We'll 
give  you-all  just  one  minute  to  clean  out  o' 
here." 

[162] 


THE  EMPLOYER  AND  THE  UNION 

The  cotton-spinner  fingers  his  watch.  And 
the  union  organizer,  whose  job  has  taught 
him  to  size  up  the  sentiment  of  crowds, 
glances  into  the  faces  before  him  and  speedily 
"gets  clean  out."  This  little  scene  has  been 
reproduced  not  once,  but  often,  in  the  facto- 
ries of  a  Georgia  employer. 

The  workmen  who  expressed  themselves 
through  one  of  their  fellows  in  this  way  liter- 
ally do  not  care  to  be  bothered  with  belonging 
to  unions,  and  with  reason.  They  have  jobs 
they  like  and  are  fitted  for.  Their  work  is 
pleasant.  Their  surroundings,  physical  and 
social,  are  in  the  main  congenial.  If  these 
happen  in  certain  instances  not  to  be  con- 
genial, the  privilege  of  changing  for  the  better 
is  open,  and  facilities  are  provided  so  they 
will  not  lose  their  jobs  or  a  single  day's  pay 
in  making  the  change.  They  can  look  out  of 
the  windows  of  their  mills  and  see  neat  little 
cottages  scattered  over  the  hills.  These  are 
their  homes.  In  most  of  the  back  yards  are 
chickens  and  a  garden.  Out  in  the  meadow 
every  man  has  a  cow.  Over  on  the  hill  is  a 
handsome  red-brick  school-house  in  which 
their  children  are  being  educated  under  the 
best  teachers  it  is  possible  to  secure.  Further- 
more, if  a  man  does  feel  that  he  has  a 
grievance,  he  has  sufficient  ability  to  think 

[163] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

for  himself  and  arrive  at  what  he  considers 
a  fair  solution  of  his  problem — and  he  knows 
that  there  is  a  straight  path  for  him  from  his 
machine  to  the  boss  or  proper  representative 
with  whom  to  discuss  the  problem. 

The  employer  in  this  plant  does  not  be- 
lieve in  unions.  He  thinks  they  are  bad  for 
both  men  and  management.  He  believes 
that  the  proper  relation  between  employers 
and  employees  is  mutual  interest,  not  conflict. 
And  he  believes  that  unions  are  sure  symptoms 
of  opposed  interests.  He  has  developed  his 
ideas  in  a  practical  way.  Surrounded  by 
unionized  plants,  he  has  not  a  single  union 
man  in  his  employ. 

"Train  the  man  to  think  for  himself,"  he 
says.  "Let  him  speak  for  himself  when  he 
wants  something.  I  think  that  is  more  logical 
than  having  a  group  of  three  hundred  or 
five  hundred  men  present  demands  through  a 
delegate." 

Radically  different  is  the  policy  of  the  con- 
cern which,  like  Hart,  Schaffner  &  Marx, 
aims  to  work  entirely  through  the  unions. 
The  text  of  the  agreement  between  this  con- 
cern and  the  workers  says  in  part: 

It  is  agreed  that  the  principle  of  the  preferential 
shop  shall  prevail,  to  be  applied  in  the  following  manner: 
Preference  shall  be  applied  in  hiring  and  discharge. 
[164] 


THE  EMPLOYER  AND  THE  UNION 

Whenever  the  employer  needs  additional  workers  he 
shall  first  make  application  to  the  union,  specifying 
the  number  and  kind  of  workers  needed.  The  union 
shall  be  given  a  reasonable  time  to  supply  the  specified 
help,  and  if  it  is  unable,  or  for  any  reason  fails  to  furnish 
the  required  people,  the  employer  shall  be  at  liberty  to 
secure  them  in  the  open  market  as  best  he  can. 

In  like  manner  the  principle  of  preference  shall  be 
applied  in  case  of  discharge.  Should  it  at  any  time  be- 
come necessary  to  reduce  the  force  in  conformity  with 
the  provisions  of  this  agreement  the  first  ones  to  be 
dismissed  shall  be  those  who  are  not  members  of  the 
union  in  good  and  regular  standing. 

After  several  years  of  operation  under  the 
agreement  with  workers,  in  which  this  pref- 
erential plan  is  an  essential  feature,  the  man- 
agement of  the  company  voiced  the  following 
opinions  about  results  before  the  Federal  In- 
dustrial Relations  Commission: 

Unions  should  be  recognized  and  favored  in  the  same 
proportion  as  they  manifest  a  genuine  desire  to  govern 
themselves  efficiently.  All  agreements  should  be  so 
drawn  as  to  release  the  employer  from  his  obligations 
whenever  the  unions  fail  to  observe  theirs.  Arbitra- 
tion boards,  officials  in  charge  of  labor  matters,  and 
union  leaders  should  direct  their  operations  and  make 
their  decisions  with  the  one  purpose  always  in  mind — 
namely,  to  make  it  profitable  and  easy  for  all  parties 
to  acquiesce  in  the  rule  of  reason  and  justice,  and  dan- 
gerous and  difficult  for  them  to  attempt  to  get  unjust 
advantage.  We  did  not  realize  and  we  believe  the 
12  [165] 


COMMON  SENSE  IN  lABOR  MANAGEMENT 

majority  of  employers  do  not  yet  realize  the  extent 
to  which  the  attitude  and  conduct  of  their  organized 
employees  reflect  their  own  policies  and  conduct. 
Strict  adherence  to  justice,  especially  if  interpreted 
to  the  people  by  a  board  in  whom  they  have  confidence, 
will  gradually  educate  them  and  their  leaders  to  see 
the  advantage  of  this  method.  It  is  fortunate  for  the 
employer  if  his  own  employees  have  an  autonomous 
organization,  influenced  as  little  as  possible  by  out- 
siders. 

In  our  own  business,  employing  thousands  of  per- 
sons, some  of  them  newly  arrived  immigrants,  some  of 
them  in  opposition  to  the  wage  system,  hostile  to  em- 
ployers as  a  class,  we  have  observed  astonishing  changes 
in  their  attitude  during  three  years  under  the  influence 
of  our  labor  arrangements.  They  seem  to  understand 
that  they  can  rely  upon  promises  made  to  them  by 
the  company;  that  all  disputes  will  be  finally  adjusted 
according  to  just  principles  interpreted  by  wise  arbi- 
trators.1 

In  neither  of  these  concerns,  both  operating 
under  radically  different  policies  with  respect 
to  unions,  have  there  been,  by  and  large,  any 
but  the  best  relations  between  the  manage- 
ment and  the  workers. 

A  third  type  of  manager  is  he  who  is  not 
inclined  to  impose  any  restrictions  one  way 
or  the  other.  An  employer  whose  plant  is 
located  close  to  Boston,  and  whose  relations 

1  See  booklet,  The  Hart,  Schaffner  &  Marx  Labor  Agreement,  issued 
in  Chicago,  1916. 

[166] 


THE  EMPLOYER  AND  THE  UNION 

with  workers  have  been  notably  fair,  told  me 
that  he  did  not  know  whether  any  of  his  em- 
ployees were  members  of  the  union  or  not. 

"Probably  some  of  them  are,"  he  remarked, 
"because  a  man  is  sometimes  socially  ostra- 
cized if  he  doesn't  join." 

But  he  has  no  relations  with  the  union  as 
a  union,  and  his  employees  do  not  feel  the 
need  of  its  assistance  in  their  dealings  with 
him.    They  have  confidence  in  his  justice. 

Of  course  there  is  also  the  manager  who  not 
only  will  have  nothing  to  do  with  the  unions, 
but  also  actually  opposes  them  by  every  fair 
or  unfair  means  available  to  his  hand.  He, 
typically,  operates  a  closed  shop;  closed 
against  union  men.  He  peremptorily  dis- 
charges any  worker  suspected  of  union  affili- 
ations. He  agrees  without  reservation  with 
a  manufacturer  who,  referring  to  his  factory 
employees,  exclaimed,  with  an  oath: 

"The  only  way  to  handle  'em  is  with  a 
club!" 

But  club  tactics  inevitably  encourage  re- 
taliation. This  kind  of  employer  classes  with 
the  revolutionary  radicals  among  the  workers ; 
and,  unfortunately,  he  is  not  yet  rare.  Prof. 
Carleton  H.  Parker  has  said  of  him,  justly, 
that  he  "tries  to  tell  a  conventional  world 
that  he  resists  the  closed  shop  because  it  is 

[167] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

un-American,  loses  him  money,  or  is  inefficient. 
A  few  years  ago  he  was  more  honest  when  he 
said  he  would  run  his  business  as  he  wished 
and  would  allow  no  man  to  tell  him  what 
to  do."  * 

The  union,  in  and  of  itself,  does  not  often 
create  just  conditions  for  workers.  Bitter  in- 
dustrial warfare  may  be  waged  where  the 
closed  union  shop  is  the  rule;  or  there  may  be 
complete  harmony.  Similarly  there  may  be 
equally  bitter  relations  where  there  are  no 
unions,  or  where  they  are  not  effective;  or 
there  may,  again,  be  complete  harmony.  If 
the  management  has  the  intention  of  justice, 
and  acts  justly,  there  is  no  need  of  unions. 
If  the  management  is  either  deliberately  or 
unconsciously  unjust,  the  unions  may  win 
victories  for  the  workers,  but  they  cannot 
of  themselves  make  the  relations  between 
the  management  and  themselves  pleasant  or 
satisfactory.  The  unions  have  in  many  in- 
stances taught  employers  the  great  under- 
lying need  for  justice,  and  have  sometimes 
pointed  the  way  to  attain  it.  In  the  last 
analysis,  however,  it  is  a  task  of  management 
to  see  that  provisions  are  made  whereby  jus- 
tice may  be  done. 

1  "  Motives  in  Economic  Life,"  The  American  Economic  Review, 
March,  1918,  Supplement,  p.  212. 

[168] 


THE  EMPLOYER  AND  THE  UNION 

I  think  any  observer  is  bound  to  find  among 
business  men  a  growing  tolerance  of  unions, 
coupled  with  continued  distrust  of  them  as 
satisfactory  agencies  for  reaching  the  mutual 
understandings  necessary  between  the  em- 
ployer and  his  employees.  And  this  is  natural. 
Organizations  like  the  unions  were  perhaps 
the  only  means  that  could  have  upheld  the 
interests  of  the  workers  in  the  transition  period 
of  industry  from  small  units  to  large — a  period 
during  which  many  employers  did  not  under- 
stand how  the  changes  in  their  industries  and 
in  their  jobs  as  leaders  were  to  affect  the  rela- 
tions of  employers  and  employees,  perhaps 
did  not  perceive  that  these  changes  were 
taking  place;  or,  as  in  some  cases,  they  de- 
liberately took  advantage  of  these  changes  to 
further,  they  supposed,  their  selfish  purposes. 

But  employers  are  coming  to  recognize  that 
the  best  interests,  even  the  selfish  purposes, 
of  business  are  not  served  by  unfairness  to 
employees.  Enlightened  management  has 
learned  that  labor,  as  I  have  said,  is  a  com- 
modity with  a  kick,  differing  radically  from 
all  other  commodities  whatsoever.  They 
have  achieved  the  feat  of  recognizing  that 
workers  in  overalls  are  human  beings,  very 
much  like  themselves  in  most  of  the  essential 
emotions  and  impulses,  impelled  to  varying 

[169] 


COMMON  SENSE   IN  LABOR  MANAGEMENT 

degrees  of  resentment  when  they  are  unfairly 
treated,  and  to  a  recognition  of  fair  play  when 
they  meet  it  face  to  face,  not  charity  patients 
seeking  the  bribery  of  gifts,  but,  normally, 
men  and  women  wishing  to  work  and  have 
joy  in  their  work  and  to  gain  happiness 
through  the  fullest  development  of  the  best 
that  is  in  them. 

It  is  impossible  and  unnecessary  to  predict 
the  future  of  unions.  That  will  adjust  itself. 
Far  more  important  is  it  to  make  certain 
that  managers  recognize  the  absolute  neces- 
sity, and  the  content  under  modern  condi- 
tions, of  the  principle  of  complete  justice  in 
industrial  relations.  Once  that  principle  is 
firmly  established,  the  means  to  its  achieve- 
ment under  varying  local  conditions  may  be 
studied  with  greater  assurance;  and  the  means 
almost  inevitably  appear. 

Of  one  fact  we  can  be  assured — there  will 
be  no  satisfactory  justice  unless  the  workers 
are  represented  fairly  in  determining  it. 
Whether  the  end  is  achieved  through  direct 
action  with  the  unions,  or  in  other  ways,  is 
clearly  of  less  importance  to  both  the  manage- 
ment and  the  workers  than  the  fact  that  it 
is  achieved  in  some  manner. 

Denial  by  the  management  that  workers 
have  the  right  to  organize,  or  discrimination 

[170] 


THE  EMPLOYER  AND  THE  UNION 

against  men  who  belong  to  unions,  has  not 
proved  in  many  cases  an  effective  means  of 
discouraging  unionism,  even  though  the  em- 
ployers who  adopt  such  tactics  may  be  pro- 
foundly convinced  that  the  union  is  an  arti- 
ficial means  of  smoothing  out  the  relations 
between  employers  and  employees.  Similarly, 
rigid  insistence  by  employees  on  the  exclusion 
of  non-union  workers  has  not  commonly  re- 
sulted in  a  frame  of  mind  in  management  con- 
ducive to  the  best  relations.  In  many  of  the 
agreements  drawn  up  to  provide  for  the  repre- 
sentation of  workers  in  individual  concerns 
it  is  expressly  stated  that  the  representation 
does  not  abridge  or  conflict  in  any  way  with 
the  right  of  employees  to  belong  to  unions. 

Progress  must  be  mutual.  Employers  can- 
not justly  improve  themselves  at  the  expense 
of  the  unions ;  nor  can  the  employees  disregard 
the  interests  of  the  employers.  President 
William  Jewett  Tucker  stated  an  important 
truth  when  he  said: 

It  is,  of  course,  entirely  obvious  that  a  greater  free- 
dom of  ruind  on  the  part  of  the  wage-earner  may  be 
expected  to  follow  the  betterment  of  his  condition. 
This  betterment  of  condition  is  the  one  and  final  ob- 
ject of  the  trade-union.  I  doubt  if  one-half  of  that 
which  the  trade-union  has  gained  for  the  wage-earner 
could  have  been  gained  in  any  other  way.    I  doubt  if 

[171] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

one-quarter  of  the  gain  would  have  been  reached  in 
any  other  way.  Trade-unionism  is  the  business  method 
of  effecting  the  betterment  of  the  wage-earner  under 
the  highly  organized  conditions  of  the  modern  industrial 
world. 

But  trade-unionism  at  its  best  must  do  its  work 
within  two  clear  limitations.  In  the  first  place,  every 
advance  which  it  tries  to  make  in  behalf  of  the  wage- 
earner  as  such  finds  a  natural  limit.  The  principle  of 
exclusiveness,  of  separate  advantage,  is  a  limited  prin- 
ciple. At  a  given  point,  now  here,  now  there,  it  is  sure 
to  react  upon  itself  or  to  be  turned  back.  Organization 
meets  opposing  organization.  Public  interests  become 
involved.  Moral  issues  are  raised.  The  co-operating 
sympathy  of  men,  which  can  always  be  counted  upon 
in  any  fair  appeal  to  it,  turns  at  once  to  rebuke  and 
restraint  if  it  is  abused.  The  wage-earner  in  a  democ- 
racy will  never  be  allowed  to  get  far  beyond  the  aver- 
age man  through  any  exclusive  advantages  he  may 
attempt  by  organization.1 

In  this,  as  in  all  similar  aspects  of  the  general 
question,  the  spirit,  purpose,  and  practice  of 
industrial  justice  are  far  more  important  than 
the  machinery  devised  to  obtain  it.  Unions 
have  been  the  objects  of  bitter  attack  by  some 
employers.  But  that  is  largely  because  those 
employers  have  not  gone  to  the  real  heart  of 
the  matter.  They  have  failed  to  perceive 
that  the  growth  of  unions  has  been  greatly 
encouraged  by  the  failure  of  management  to 

1  Public  Mindedness,  the  Rumford  Press,  pp.  169-170. 

[172] 


THE  EMPLOYER  AND  THE  UNION 

recognize  the  true  significance  of  the  changes 
in  the  industrial  structure  in  their  bearing  on 
the  relations  between  employers  and  em- 
ployees. But  the  time  has  passed  when 
management  can  wisely  or  profitably  fail  to 
accept  its  share  of  responsibility. 

Great  good  can  undoubtedly  come  from  the 
open-minded  co-operation  of  employers  with 
the  best  conservative  union  leaders,  in  the 
attempt  to  work  out  answers  to  the  many 
problems  involved,  problems  that  need  for 
their  proper  handling  the  greatest  wisdom  and 
the  clearest  vision  that  are  anywhere  to  be 
had. 


X 

THE   FALLACY   OF   PANACEAS 

Management  must  be  frank,  forceful,  and  just — No  panacea 
for  industrial  unrest— It  is  human  for  men  to  disagree 
— Most  disputes  easily  settled  when  men  understand 
one  another — Lack  of  sincerity  is  fatal — Management 
a  task  requiring  great  skill — Business  "secrets"  are 
passing — Industrial  spies — Three  essentials  for  successful 
relations  with  workers — The  plan  must  fit  the  man — 
A  new  spirit  in  business. 

/^NLY  one  theme  runs  through  this  book — 
^-"'  the  need  for  frankness,  force,  and  justice 
in  management.  These  qualities  are  not  pan- 
aceas, but  fundamentals.  Without  them  no 
plan  of  management,  however  elaborately 
planned  and  built,  can  have  a  full  measure 
of  success. 

Distrust  panaceas.  No  patent  medicine 
has  been  invented  that  will  cure  all  industrial 
evils.  None  ever  will  be,  so  long  as  human 
beings  have  souls  and  minds,  tempers,  in- 
terests, wills,  passions,  and  individualities  all 
their  own.  The  management  that  goes  out 
with  gold  in  its  hand,  and  gold  alone,  seeking 

[174  1 


THE  FALLACY  OF  PANACEAS 

to  buy  industrial  peace,  is  taking  a  sure  road 
in  the  direction  of  industrial  warfare.  Money 
alone  will  not  buy  industrial  peace;  nor  will 
suggestion  systems,  nor  schemes  for  industrial 
democracy,  nor  welfare  work,  nor  educational 
programs,  not  even  good  intentions,  if  the 
owners  of  them  are  guided  into  the  wrong 
channels.  Elemental  justice  in  all  the  relations 
of  employers  and  employees,  complete  frank- 
ness in  explaining  and  discussing  what  is 
just,  and  rugged  force  in  carrying  out  the 
decrees  of  justice — that  is  the  policy  of  man- 
agement that  makes  for  industrial  peace. 

It  is  not  a  policy  of  theory,  but  of  eminently 
successful  practice.  It  is  not  an  easy  policy. 
It  does  not  do  away  with  the  clash  of  minds, 
the  play  of  passions.  It  does  make  pro- 
visions for  men  who  think  they  disagree  to 
meet  on  a  basis  which  enables  them  to  come 
to  a  mutual  understanding  of  terms,  condi- 
tions, and  difficulties,  and  to  offer  suggestions 
leading  toward  the  just  solution.  It  recog- 
nizes the  great  fact  that  when  men  get  their 
feet  under  the  same  table,  and  talk  with  one 
another  on  terms  of  equality,  the  differences 
of  mere  understanding  are  likely  to  disappear 
rapidly,  and  the  differences  as  to  facts  can 
be  cleared  up  through  impartial  consideration. 

And  this  does  not  refer  to  those  infrequent 

[175] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

and  formal  cases  of  arbitration  through  out- 
side agencies  that  occur  only  after  both  parties 
to  a  controversy,  by  word  or  deed,  have  com- 
mitted themselves  to  a  course  of  action.  It 
has  been  proved  many  times  that  most  dis- 
putes in  industry  can  be  settled  without  the 
intervention  of  outside  agencies,  if  the  man- 
agement has  the  intention  of  justice,  and  co- 
operates frankly  with  employees  to  determine 
the  content  of  justice  and  the  method  of 
carrying  out  its  decrees.  Wise  management 
provides  the  machinery,  whatever  it  may  be, 
for  frank,  full,  and  fair  consideration  and  ad- 
justment of  all  differences,  whenever  they 
arise.  And  of  course  it  also  does  much  more 
in  attempting  to  provide  the  opportunities 
for  men  to  realize  through  their  work  the 
best  of  their  abilities. 

I  do  not  expect  ever  to  find  any  employer 
who  is  perfect  in  the  quality  of  justice,  utterly 
frank,  and  always  ruggedly  forceful.  It  is 
human  to  misunderstand  and  to  reason  in- 
correctly. Habit  and  nature  play  us  tricks. 
On  one  occasion  the  young  woman  head  of 
an  office  department  fell  behind  with  her  work. 
Being  conscientious,  she  asked  the  girls  in 
her  department  to  come  down  with  her  for 
a  few  hours  on  a  public  holiday,  to  catch  up. 
They  did  so. 

[176] 


THE  FALLACY  OF  PANACEAS 

It  happened  that  while  they  were  at  their 
self-appointed  task  the  manager  came  in.  He 
evidently  was  deeply  engrossed  in  a  problem 
of  his  own.  Instead  of  indicating  surprise 
or  pleasure  upon  finding  the  girls  at  work 
when  every  one  else  was  on  holiday  he  did 
not  even  say,  "Good  morning!" 

Habit  played  him  that  trick.  He  utterly 
ignored  the  unasked  effort,  not  purposely,  but 
simply  because  it  was  not  his  custom  to  greet 
his  employees  when  he  came  in.  I  know  that 
this  manager  has  spent  many  hours  trying  to 
invent  ways  to  reduce  a  tragically  high  rate 
of  turnover  among  employees  in  his  office. 
He  strives  conscientiously  to  correct  manage- 
ment faults  in  himself  that  he  has  more  or 
less  clearly  perceived.  Yet  on  this  occasion 
he  neglected  the  simple  courtesy  of  a  friendly 
word,  the  nod  of  the  head  that  would  have  in- 
dicated appreciation  of  the  workers'  effort — 
powerful  and  subtle  tools  of  management 
these!  He  left  his  loyal  department  head  in 
a  frame  of  mind  to  complain  that  it  would  be 
many  days  before  she  would  again  go  out 
of  her  way  to  catch  up  with  lagging  work! 

The  problem  of  management  in  industry 
is  as  large  as  the  problem  of  the  development 
of  human  character.  And  therein  lies  its 
fascination. 

[177] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

The  manager,  in  his  own  person  or  through 
his  personnel  executive,  should  be  at  least  as 
careful  a  student  of  crowd  psychology  as  the 
union  leader,  who  has  the  knack,  typically, 
of  perceiving  when  conditions  are  ripe  for 
calling  a  strike.  He  should  provide  the  means 
of  knowing  when  conditions  are  ripe  for  fric- 
tion, and  should  make  it  one  of  his  foremost 
jobs  to  correct  or  prevent  such  conditions. 

The  capable  manager  keeps  close  to  his 
workers'  minds.  He  knows,  from  frequent 
and  intimate  contact  with  them,  what  their 
varying  reactions  are  likely  to  be  under  given 
circumstances.  He  knows  that  there  is  noth- 
ing more  sacred  in  an  expanse  of  mahogany 
table-top  than  in  a  turret  lathe;  nothing  more 
human  in  the  person  of  a  white-collared  worker 
than  in  a  greasy -handed  operative.  Both  are 
God's  creatures.  Both,  according  to  their 
abilities,  are  doing  necessary  things  to  keep 
the  world  moving  and  to  make  industry 
thrifty.  But  how  easy  it  is  to  forget  this  when 
we  sit  in  our  cozy  offices  and  gaze  complacently 
upon  our  manicured  finger-nails;  or,  more 
probably,  when  we  stand  face  to  face  with  the 
greasy-handed  operative,  and  he  selfishly  de- 
mands something  that  we  as  selfishly  deter- 
mine he  shall  not  have! 

A  dime  held  close  to  the  eye  covers  the 

[178] 


THE  FALLACY  OF  PANACEAS 

moon.  A  little  matter  of  title,  neighborhood, 
millinery,  education,  or  race  blinds  us  to  the 
great  fact  of  the  innate  similarity  of  all  of 
us,  greatest  and  least.  I  am  not  stating  this 
well-worn  fact  with  any  chiding  purpose  of 
reform.  As  long  as  men  work  side  by  side, 
or  have  anything  to  do  with  one  another, 
interests  and  personalities  will  continue  to 
clash,  sparks  of  resentment  will  inevitably 
fly,  there  will  be  perpetual  chafing  over  little 
things,  accusations  and  counter-accusations, 
childish  quarrels  for  the  most  part,  perhaps; 
but  the  greatest  are  childish  about  some 
things,  and  we  can  hardly  expect  better  of 
those  whose  understanding  or  training  may 
be  much  less.  Let  management  recognize  the 
tremendous  importance  of  trifles,  and  guard 
against  permanent  harm  in  the  only  way  pos- 
sible— namely,  by  weaving  into  the  daily 
thought-fabric  of  workers  the  feeling  of  con- 
fidence that  when  conditions  making  for  in- 
justice do  appear  the  management  will  be 
fair  and  frank  in  adjusting  them. 

Motives  in  industry,  as  in  life,  are  strongly 
tinged  with  selfishness.  That  fact  in  itself 
is  no  destroyer  of  confidence  in  the  relations 
of  the  management  and  the  men,  for  the  cir- 
cumstance is  pretty  certain  to  be  mutual. 

What  does  do  harm  is  failure  to  be  frank  about 

r  179 1 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

it.  If  the  motive  in  a  given  activity  is  selfish, 
the  wisest  experience  urges  that  the  selfish 
element  should  by  all  means  stand  revealed. 
If  there  is  no  selfish  benefit  to  be  gained  by 
the  other  bargainer,  then  the  program  is 
clearly  unjust.  If  there  is  no  concealment, 
the  purely  selfish  advantages  to  the  worker 
may  probably  outweigh  in  his  eyes  the  selfish 
gain  of  the  employer,  and  he  will  accept  it. 
But  if  frankness  is  absent,  if  the  endeavor  is 
made  to  disguise  a  selfish  purpose  under  a 
cloak  of  disinterestedness  or  philanthropy, 
confidence  flies  out  of  the  window  and  the 
worker's  imagination  darkly  supplies  all  and 
more  that  the  employer  tries  to  conceal. 

Any  lack  of  sincerity  in  proposing  a  step 
concerning  both  the  employer  and  the  em- 
ployee will  be  immediately  evident,  and  will 
operate  sooner  or  later  to  render  it  ineffective. 
The  insincerity  cannot  be  hidden.  Sincerity, 
on  the  other  hand,  is  not  an  object  *of  suspicion 
merely  because  it  has  for  its  aim  the  logical 
purpose  of  business — namely,  earning  profits. 
Plenty  of  managers  desire  to  do  something  to 
end  their  troubles  with  employees,  prompted 
by  the  fear  of  what  may  happen  if  they  fail 
to  end  them.  But  the  means  used  too  often 
have  their  being  merely  on  the  surface,  not 
in  the  heart.     Half-way  measures  are  futile. 

[180] 


THE  FALLACY  OF  PANACEAS 

Whatever  is  done  must  be  done  because  it  is 
right,  ethically,  socially,  and  commercially. 

It  is  not  my  thought  to  underemphasize  the 
fact  that  in  making  a  business  profitable  by 
just  methods  the  manager  is  doing  a  service 
to  society,  a  service  in  which  he  may  take 
a  greater  personal  satisfaction  than  in  the 
mere  accumulation  of  profits.  The  futility 
of  accumulation  for  its  own  sake  has  been 
often  dwelt  upon.  The  joy  of  achievement, 
what  Theodore  Roosevelt  meant  when  he 
urged  men  to  "spend  and  be  spent,"  is  one  of 
the  great  satisfactions  of  life.  I  seriously 
doubt  whether  the  great  enterprises  of  man- 
agement would  ever  be  achieved  were  the 
prospective  financial  reward  the  primary 
incentive. 

With  the  satisfactions  of  achievement  come 
responsibilities.  Frank  Waterhouse,  president 
of  a  Pacific  coast  shipping  company,  expressed 
to  me  a  sentiment  common  to  many  executives 
of  notable  achievement  when  he  said,  "I  feel 
that  any  man  placed  in  charge  of  large  affairs 
owes  a  duty,  in  return  for  the  superior  ad- 
vantages accorded  him,  to  the  workers  with 
whom  he  is  associated."  In  passing,  let  me 
point  out  that  the  responsibility  extends  farther 
than  to  employees.  Though  it  is  outside 
the  scope   of   the   present   consideration,   it 

13  J 181  ] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

reaches  on  to  customers  and  to  the  public 
at  large.  The  offices  of  this  responsibility 
are  best  performed,  not  through  mere  charity 
or  mere  philanthropy,  but  through  providing 
adequate  opportunities  for  the  fullest  realiza- 
tion of  the  individual  employee's  highest 
abilities.  As  I  have  pointed  out,  it  requires 
more  skill  to  manage  men  with  perfect  frank- 
ness, justice,  and  force  than  in  the  ways  of 
arrogant  autocracy.  In  the  fullest  realiza- 
tion of  himself  in  his  business,  therefore,  the 
manager  best  fulfils  his  duties  to  his  employees 
and  to  society.  Other  things  being  equal, 
experience  goes  to  prove  that  the  business  that 
is  most  profitable  is  best  managed. 

There  is  little  room  in  the  counsels  of  suc- 
cessful business  for  the  type  of  manager  of 
whom  I  heard  the  other  day.  Shortly  after 
the  war,  at  a  time  when  it  seemed  likely  that 
conditions  would  reverse  themselves  and  there 
would  be  more  workers  than  jobs  about,  he 
was  capable  of  saying,  vindictively,  "It's 
going  to  be  our  turn  for  a  while,  now!" 

In  the  pursuit  of  industrial  justice,  secrecy 
is  one  common  trait  in  management  that  man- 
agers find  they  must  subject  to  modification. 
As  between  the  workers  and  the  management, 
secrecy  results  from  one  of  two  conditions: 
first,  fear  that  the  workers  might  unwisely 

[182] 


THE  FALLACY  OF  PANACEAS 

reveal  important  facts  to  competitors;  or 
second,  fear  that  they  will  learn  of  the  injustice 
of  management  toward  themselves. 

However  valid  the  first  reason  may  be,  the 
second  is  utterly  untenable.  In  plants  where 
wages  are  set  by  rule  of  thumb  and  the  squeeze 
bargain,  without  the  intervention  of  unions, 
secrecy  is  founded  on  the  thought  that  if 
Jack,  say,  were  to  have  a  look  at  the  pay- 
roll, he  would  learn  that  Bill  is  getting  a 
dollar  a  week  more  than  he;  whereas  Bill,  to 
Jack's  knowledge,  is  not  so  good  a  workman. 
He  is  merely  a  better  bargainer.  If  the 
management  has  secrets,  the  men  will  have 
them,  too.  Some  concerns  are  already  throw- 
ing their  books  open  to  the  authorized  repre- 
sentatives of  the  men. 

Comparable  to  the  man  who  insists  on 
secrecy  is  he  who  stoops  to  hire  spies,  the 
odious  agents  of  autocracy.  Their  employ- 
ment in  industry  is  a  direct  confession  by  the 
manager  of  his  weakness.  Having  discovered 
his  inability  to  create  conditions  sufficiently 
good  to  win  the  confidence  of  the  workers, 
having  accepted  conflict  as  inevitable,  he 
places  his  paid  emissaries  in  the  hostile  camp 
to  worm  his  way  into  the  confidence  of  men 
whose  confidence  he  cannot  win  himself;  to 
acquire  foreknowledge  of  coming  events;  to 

[183J 


COMMON   SENSE   TN   LABOR  MANAGEMENT 

eliminate  opposing  leaders;  to  betray  his  work- 
ing associates !  I  know  of  at  least  one  instance 
where  the  employees  matched  spy  with  spy, 
and  had  as  their  representative  the  confidential 
secretary  of  a  high  executive! 

The  right-minded  manager  does  not  want 
associates  on  whom  he  must  spy;  men  who  look 
at  him  blackly  under  their  eyebrows  as  he 
passes,  who  must  be  threatened  and  coerced, 
who  may  be  cowed  into  submission.  In  the 
office  of  a  Seattle  dock  superintendent  I  saw 
half  a  dozen  bright  rifles  in  a  rack  on  the  wall. 

"That's  the  best  way,"  the  superintendent 
told  me,  "to  talk  with  the  dock  hands.  If  I 
had  my  way,  I'd  close  every  dock  in  Seattle 
for  thirty  days  and  let  the  beggars  starve!" 

Fortunately  this  type  of  manager  is  coming 
less  and  less  to  have  his  way.  Enlightened 
employers  know  the  worth  of  the  worker  who 
stands  firmly  on  his  feet  and  looks  his  superior 
squarely  in  the  eye,  conjident,  competent, 
unafraid. 

In  the  chapters  of  this  book  I  have  tried  to 
sketch  some  types  of  machinery  for  building 
confidence  in  the  management.  And  I  have 
tried  to  emphasize  in  each  instance  that  where 
the  machinery  succeeded  it  did  so,  not  because 
of  any  universally  tonic  properties  of  the  plan 
itself,   but  because  it  happened   to  fit   well 

[184] 


THE   FALLACY   OF   PANACEAS 

with  conditions  in  the  plant  where  it  was  used, 
and  that  it  was  directed  intelligently,  with 
justice,  frankness,  and  force,  by  the  manage- 
ment. 

The  plan  must  fit  the  man.  One  company 
president  eats  lunch  with  his  workers.  He  sits 
down  in  the  factory  restaurant  among  them 
wherever  he  happens  to  find  an  unoccupied 
seat.  A  man  of  another  temperament  might 
do  more  harm  than  good  that  way.  Still 
another  president  is  frequently  to  be  seen  in 
his  shirt-sleeves  in  the  factory  departments, 
consulting,  advising,  and  getting  his  hands 
dirty !  But  some  men  doing  that  would  merely 
lay  themselves  open  to  derision,  because  work- 
ers would  perceive  that  the  action  was  not 
natural.  Workers  do  not  resent  reserve  or 
natural  dignity.  They  do  keenly  resent  any 
affectation  of  class  distinction  or  injierent 
superiority,  the  kind  of  bearing  that  suggests 
the  remark,  "He  certainly  thinks  he's  itl" 

The  plan,  or  theory,  then,  is  not  nearly  so 
important  as  the  practice.  The  best-devised 
plan  in  the  world  is  sure  to  fall  short  of  its 
real  purpose  if  it  is  directed  without  justice 
and  without  a  sympathetic  understanding  of 
human  nature.  No  plan  can  be  divorced  from 
its  sponsors  and  proposed  as  a  cure-all.  And, 
whatever  plan  the  management  does  under- 

[185] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

take,  it  must  be  administered  justly,  frankly, 
and  forcefully.  I  think  it  will  be  found  that 
no  plan  will  work  to  the  best  advantage  which 
does  not  guarantee  at  least  three  things,  all 
previously  discussed: 

1.  A  fair  compensation  both  to  the  worker 
and  to  the  employer. 

2.  A  fair  chance  to  enjoy  the  work  in  and 
of  itself,  or  for  the  satisfactions,  of  whatever 
kind,  that  result  from  doing  it. 

3.  A  fair  opportunity  to  take  advantage 
of  the  better  things  of  life  after  the  worker 
steps  out  of  the  door  of  the  plant  when  the 
day's  or  week's  or  year's  work  is  done. 

These  things  are  fundamental. 

Greater  production  at  a  reasonable  cost  is 
to  the  interest  of  the  employer,  the  employee, 
and  society.  No  subversion  of  fundamental 
truths  can  permanently  hide  that  fact.  The 
interests  of  management  and  of  society  in 
greater  production  are  easy  to  determine. 
No  less  is  the  interest  of  employees,  though 
in  some  directions  the  theory  of  restricted 
production  has  been  urged — a  theory  as  sub- 
versive of  the  moral  character  of  the  work- 
man as  it  is  of  the  interest  of  his  pocketbook. 
The  theory,  of  course,  had  its  origin  in,  and 
was  a  natural  reaction  to,  the  unwise  speeding- 
up  methods  too  often  used  in  autocratically 

[186] 


THE  FALLACY  OF  PANACEAS 

managed  industries.  In  the  light  of  new 
management  truths,  and  under  the  guidance 
of  employers  controlled  by  principles  of  fun- 
damental justice,  the  fallacy  cannot  and  will 
not  persist. 

I  should  like  to  close  this  last  chapter,  as  I 
closed  the  first,  with  the  thought  that  a  new 
spirit  is  moving  all  through  business — a  spirit 
that  is  tending  to  make  business  more  like 
the  professions  in  point  of  service  to  society. 
There  is  yet  a  long  road  ahead  to  travel. 
There  is  still  vast  disagreement  as  to  what 
might  be  fixed  on  even  tentatively  as  a  satis- 
factory code  of  business  ethics.  It  will  be  a 
joy  for  all  who  have  a  share  in  managing  and 
working  to  aid  in  the  solution  of  these  things. 

That  joy  will  not  be  confined  to  the  masters 
and  great  leaders.  It  will  be  shared  in  a  degree 
by  the  humblest  workers. 

The  problems  of  business  in  the  broad 
spaces  of  the  world  are  among  the  greatest 
tasks  facing  us  to-day.  And  far  from  the  least 
of  them  are  the  tasks  of  management. 


APPENDICES 


APPENDIX  I 

THE    INTERNATIONAL    HARVESTER    COMPANY'S    IN- 
DUSTRIAL   COUNCIL    PLAN 

THE  following  is  the  text  of  the  industrial 
council  plan  proposed  to  its  employees  by 
the  International  Harvester  Company,  and  ac- 
cepted in  nineteen  of  the  twenty  plants: 

Article  I.    Purpose 

The  Employees  and  the  Management  of  the 
International  Harvester  Company  and  its  sub- 
sidiary companies  [but  in  Canada,  of  the  Interna- 
tional Harvester  Company  of  Canada,  Limited] 
undertake  by  the  adoption  of  this  plan  of  an  In- 
dustrial Council  to  establish  these  relations  upon 
a  definite  and  durable  basis  of  mutual  understand- 
ing and  confidence. 

To  this  end  the  Employees  and  the  Manage- 
ment shall  have  equal  representation  in  the  con- 
sideration of  all  questions  of  policy  relating  to 
working  conditions,  health,  safety,  hours  of  labor, 
wages,  recreation,  education,  and  other  similar 
matters  of  mutual  interest. 

[191] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

Article  II.     Works  Councils 

As  the  principal  means  of  carrying  this  plan 
into  effect,  there  shall  be  organized,  at  each  Works 
adopting  the  plan,  a  Works  Council  composed  of 
Representatives  of  the  Employees,  and  Represent- 
atives of  the  Management.  The  Employee  Rep- 
resentatives shall  be  elected  by  the  employees.  The 
Management  Representatives  shall  be  appointed 
by  the  management,  and  shall  not  exceed  the 
Employee  Representatives  in  number.  Both  shall 
at  all  times  have  an  equal  voice  and  voting  power 
in  considering  matters  coming  before  the  Council. 

Through  these  Councils  any  employee  or  group 
of  employees,  or  the  management,  may  at  any 
time  present  suggestions,  requests,  or  complaints 
with  the  certainty  of  a  full  and  fair  hearing. 
Matters  which  cannot  be  thus  disposed  of  may, 
by  mutual  consent,  be  submitted  to  impartial 
arbitration  as  hereinafter  provided. 

Article  III.     Department  of  Industrial 
Relations 

To  aid  in  carrying  out  this  plan  the  Company 
has  established  a  Department  of  Industrial  Re- 
lations which  is  charged  with  the  duty  of  giving 
special  attention  to  all  matters  pertaining  to  labor 
policies  and  the  well-being  of  the  employees. 

Article  IV.     Voting  Division 

The  basis  of  representation  shall  generally  be 
one  Employee  Representative  for  each  two  hun- 

[192] 


APPENDIX  I 

dred  to  three  hundred  employees,  but  in  no  case 
shall  there  be  less  than  five  Employee  Represent- 
atives in  the  Works  Council. 

In  order  that  the  different  departments  and 
crafts  may  be  fairly  represented,  each  Works  shall 
be  divided  into  Voting  Divisions,  and  each  Divi- 
sion shall  be  assigned  its  proper  number  of  Repre- 
sentatives based  upon  the  average  number  of 
persons  employed  therein  during  the  month  of 
December  preceding  the  election. 

The  Works  Council  may  change  the  Voting 
Divisions  whenever  necessary  to  secure  complete 
and  fair  representation. 

Article  V.     Qualifications  of  Employee 
Rei  resentatives 

1.  To  be  eligible  for  nomination  as  Employee 
Representative  from  any  Voting  Division,  the 
Employee  must  be  employed  therein. 

2.  Foremen,  assistant  foremen,  and  other  em- 
ployees having  the  power  of  employment  or  dis- 
charge, shall  not  be  eligible  for  nomination. 

3.  Only  employees  who  are  citizens  of  the 
United  States  [but  in  Canada,  employees  who  are 
Canadian  or  British  subjects]  twenty-one  years  old 
or  over,  and  have  been  continuously  in  the  Works' 
service  for  one  year  immediately  prior  to  nomina- 
tion, as  shown  on  the  records  of  the  Employment 
Department,  shall  be  eligible  for  nomination  as 
Employee  Representatives. 

[193] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

Article  VI.    Nomination  and  Election  of 
Employee  Representatives 

1 .  Nomination  and  election  of  Employee  Repre- 
sentatives shall  be  by  secret  ballot.  The  first 
nomination  and  election  shall  be  held  as  soon  as 
practicable  after  the  adoption  of  this  plan,  at 
which  time  the  full  number  of  Employee  Repre- 
sentatives shall  be  elected. 

2.  At  the  first  meeting  of  the  Works  Council 
the  Employee  Representatives  shall  be  divided 
by  lot  into  two  classes,  one-half  with  terms  ex- 
piring on  January  1,  1920,  and  the  other  half  with 
terms  expiring  on  July  1,  1920.  Thereafter  the 
election  of  Employee  Representatives  of  the  first 
class  shall  be  held  in  December  and  of  the  second 
class  in  June.  Except  as  above  provided,  all 
Employee  Representatives  shall  hold  office  for 
one  year  and  until  their  successors  are  duly 
elected. 

3.  Notice  of  the  time  appointed  for  nominations 
and  elections  shall  be  given  by  bulletins  posted 
publicly  in  the  Works  at  least  two  days  before  the 
date  set  for  the  nominating  ballot. 

4.  All  employees,  both  men  and  women,  shall 
be  entitled  to  vote,  except  foremen,  assistant  fore- 
men, and  other  employees  having  the  power  of 
employment  or  discharge. 

Nominations 

5.  Nominations  shall  be  made  in  the  following 
manner:  Not  more  than  four  days  before  the  date 

[194] 


APPENDIX  I 

fixed  for  the  election,  a  nominating  vote  shall  be 
taken.  A  blank  ballot  stating  the  number  of 
Representatives  to  be  nominated  from  his  Voting 
Division  will  be  offered  to  each  employee  present 
at  work  on  the  date  of  the  nomination,  including 
all  workers  on  the  night  turn,  if  any. 

6.  On  this  ballot  the  employee  will  write  (or  he 
may  have  a  fellow-employee  write  for  him)  the 
name  of  the  person  he  desires  to  nominate.  If 
his  Voting  Division  is  to  elect  one  Representative 
then  one  name  shall  be  written  on  the  ballot; 
if  his  Voting  Division  is  to  elect  two  Representa- 
tives, then  two  names,  and  so  on. 

7.  Any  ballot  containing  more  names  than  the 
number  of  Representatives  to  be  elected  from  that 
Voting  Division  shall  not  be  counted. 

8.  Employees  will  deposit  their  ballots  in  a  locked 
box  carried  by  a  teller  representing  the  employees, 
who  shall  be  accompanied  by  a  timekeeper. 

9.  When  all  who  desire  have  voted,  the  time- 
keeper and  two  employee  watchers  shall  open  the 
ballot-box  and  count  and  record  the  votes,  in  the 
presence  of  the  Works  Auditor,  or  person  desig- 
nated by  him. 

10.  In  Voting  Divisions  from  which  one  Repre- 
sentative is  to  be  elected,  the  two  persons  receiving 
the  highest  number  of  votes  shall  be  declared 
nominated.  If  any  Voting  Division  is  to  elect 
two  Representatives,  then  the  four  persons  receiv- 
ing the  highest  number  of  votes  shall  be  declared 
nominated,  and  so  on. 

[195] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

11.  If  any  person  nominated  is  disqualified 
under  the  provisions  of  Article  V,  then  the  properly 
qualified  candidate  receiving  the  next  highest 
number  of  votes  shall  be  declared  the  nominee. 

12.  The  results  of  the  balloting  and  the  names 
of  the  nominees  shall  be  posted  in  the  Works  as 
soon  as  the  votes  have  been  counted  and  the 
nominations  declared. 

Elections 

13.  Not  more  than  four  days  after  the  nomina- 
tions are  posted,  the  election  by  secret  ballot  shall 
be  held  in  the  same  manner  as  for  nominations, 
except  that  at  the  election  only  the  names  of  the 
persons  who  have  been  duly  nominated  shall  ap- 
pear on  the  ballots,  and  these  persons  alone  can 
be  voted  for. 

14.  The  name  of  the  nominee  receiving  the 
highest  number  of  votes  shall  be  placed  first  upon 
the  election  ballot;  the  name  of  the  nominee  re- 
ceiving the  next  highest  number  shall  be  placed 
next  on  the  election  ballot,  and  so  on. 

15.  At  the  election  the  candidate  or  candidates 
receiving  the  highest  number  of  votes  in  his  or 
their  Voting  Division  shall  be  declared  elected 
members  of  the  Works  Council. 

Article  VII.    Appointment  op  Management 
Representatives 

Upon  the  election  of  the  Employee  Representa- 
tives the  management  will  announce  the  appoint- 

[196] 


APPENDIX  1 

ment  of  the  Management  Representatives  in  the 
Works  Council,  whose  number  shall  in  no  case 
exceed  the  number  of  elected  Employee  Repre- 
sentatives. 

Article  VIII.     Vacancies  in  the  Works 
Council 

1.  If  any  Employee  Representative  leaves  the 
service  of  the  Works,  or  becomes  ineligible  for 
any  of  the  reasons  stated  in  Section  V,  or  is  re- 
called, as  provided  in  Section  IX,  or  is  absent  from 
more  than  four  consecutive  meetings  of  the  Works 
Council  without  such  absence  being  excused  by 
the  Council,  his  membership  therein  shall  immedi- 
ately cease. 

2.  All  vacancies  among  the  Employee  Repre- 
sentatives shall  be  promptly  filled  by  special 
nomination  and  election,  conducted  under  the 
direction  of  the  Works  Council  in  the  same  man- 
ner as  regular  nominations  and  elections.  Va- 
cancies among  the  Management  Representatives 
shall  be  filled  by  appointment  by  the  management. 

Article  IX.     Recall  of  Employee  Repre- 
sentatives 

1.  If  the  services  of  any  Employee  Representa- 
tive become  unsatisfactory  to  the  Employees  of 
the  Voting  Division  from  which  he  was  elected, 
they  may  recall  him  in  the  manner  herein  provided. 

2.  Whenever  a  petition  is  filed  with  the  Chair- 
14  [ 197 1 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

man  of  the  Works  Council  signed  by  not  less  than 
one-third  of  the  Employees  of  a  Voting  Division, 
asking  for  the  recall  of  their  Representative,  a 
special  election  by  secret  ballot  shall  be  held  in  that 
Voting  Division  under  the  direction  of  the  Works 
Council,  to  decide  whether  such  Representative 
shall  be  recalled  or  continued  in  office. 

3.  If  at  such  election  a  majority  of  the  em- 
ployees in  the  Voting  Division  vote  in  favor  of 
recalling  their  Representative,  then  his  term  of 
office  shall  immediately  cease;  otherwise  he  shall 
continue  in  office. 

4.  Any  vacancy  so  created  shall  be  immedi- 
ately filled  by  a  special  election,  as  provided  in 
Section  VIII. 

Article  X.    Organization  and  Meetings  of 
the  Works  Council 

1.  The  Manager  of  the  Department  of  Indus- 
trial Relations  or  some  one  designated  by  him, 
shall  act  as  Chairman  of  the  Works  Council.  A 
Secretary  shall  be  appointed  by  the  Superintendent 
of  the  Works.  Neither  the  Chairman  nor  Secre- 
tary shall  have  a  vote. 

2.  A  majority  of  the  Employee  Representatives, 
together  with  a  majority  of  the  Management 
Representatives,  shall  constitute  a  quorum,  and 
no  business  shall  be  transacted  at  any  meeting 
where  less  than  a  quorum  is  present. 

3.  The  Works  Council  may  appoint  such  sub- 

[198] 


APPENDIX  I 

committees  as  it  deems  desirable  for  efficient  con- 
duct of  its  business.  On  all  such  sub-committees 
both  the  employees  and  the  management  shall 
be  represented,  and  each  group  of  Representatives 
shall  have  equal  voting  power. 

4.  The  Works  Council  shall  hold  regular  month- 
ly meetings  at  times  fixed  by  the  Council.  Special 
meetings  shall  be  called  on  three  days'  written 
notice  by  the  Chairman,  Secretary,  or  any  three 
members  of  the  Council.  Sub-committees  shall 
meet  whenever  necessary. 

5.  The  Company  shall  provide  at  its  expense 
suitable  places  for  meetings  of  the  Works  Council 
and  its  sub-committees  and  the  Employee  Repre- 
sentatives thereon. 

6.  Employees  serving  as  members  of  the  Works 
Council  shall  receive  their  regular  pay  from  the 
Company  during  such  absence  from  work  as  this 
service  actually  requires,  except  that  if  the  Em- 
ployee Representatives  so  desire,  they  shall  be 
at  liberty  to  arrange  for  compensation  to  be  paid 
by  pro  rata  assessment  among  the  employees. 

7.  Employees  attending  any  meeting  at  the 
request  of  the  Works  Council  or  any  sub-com- 
mittee, shall  receive  their  regular  pay  from  the 
Company  for  such  time  as  they  are  actually  and 
necessarily  absent  from  work  on  this  account. 

8.  The  Works  Council  may  prepare  and  dis- 
tribute to  the  employees  reports  of  its  proceedings, 
and  the  expense  thereof  shall  be  borne  by  the 
Company. 

[199] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

Article  XI.     Duties  and  Powers  of  the 
Works  Council 

1.  The  Works  Council  may  consider  and  make 
recommendations  on  all  questions  relating  to 
working  conditions,  protection  of  health,  safety, 
wages,  hours  of  labor,  recreation,  education,  and 
other  similar  matters  of  mutual  interest  to  the 
employees  and  the  management.  It  shall  afford 
full  opportunity  for  the  presentation  and  discus- 
sion of  these  matters. 

2.  The  Works  Council  may  on  its  own  motion 
investigate  matters  of  mutual  interest  and  make 
recommendations  thereon  to  the  Works  Manage- 
ment; and  the  management  also  may  refer 
matters  to  the  Works  Council  for  investigation 
and  report. 

3.  The  Works  Council  may  confer  with  the 
Superintendent  or  other  person  designated  by  him 
in  regard  to  all  matters  of  mutual  interest,  and 
shall  receive  from  the  management  regular  reports 
in  regard  to  accident  prevention,  sanitation,  res- 
taurants, medical  service,  employment,  educa- 
tional programs,  and  recreational  activities,  in- 
cluding information  as  to  the  cost,  efficiency,  and 
results  obtained. 

4.  The  Works  Council  shall  be  concerned  solely 
ith  shaping  the  policies  of  the  Company  relating 

to  the  matters  heretofore  mentioned.  When  the 
policy  of  the  Company  as  to  any  of  these  matters 
has  been  settled,  its  execution  shall  remain  with 

[200] 


APPENDIX  I 

the  management,  but  the  manner  of  that  execu- 
tion may  at  any  time  be  a  subject  for  the  consid- 
eration of  the  Works  Council. 

Article  XII.     Procedure  of  Works  Council 

1.  Employees  desiring  to  bring  any  matters 
before  the  Works  Council  may  present  these  to 
the  Secretary  of  the  Council  either  in  person  or 
through  their  Representatives.  It  shall  be  the 
Secretary's  duty  first  to  ascertain  whether  the 
matter  has  been  properly  presented  through  the 
regular  channels  to  the  Superintendent,  and  if 
not  he  shall  see  that  this  is  promptly  done. 

2.  If  the  matter  is  not  satisfactorily  disposed 
of  in  this  manner,  the  Secretary  shall  submit  a 
written  statement  of  the  matter  to  each  member 
of  the  Works  Council  at  least  three  days  before 
the  next  regular  meeting. 

3.  Any  employee  or  group  of  employees  thus 
referring  a  matter  to  the  Works  Council  shall 
have  an  opportunity  to  appear  before  it  and 
present  the  case.  Any  such  group  of  em- 
ployees shall  select  not  more  than  three  spokes- 
men from  their  own  number  to  appear  before  the 
Council. 

4.  The  Works  Council  may  call  any  employee 
before  it  to  give  information  regarding  any  mat- 
ter under  consideration.  The  Works  Council,  or 
any  sub-committees  appointed  by  it  for  that  pur- 
pose, may  go  in  a  body  to  any  part  of  the  plant 
to  make  investigations. 

[201] 


COMMON   SENSE   IN  LABOR  MANAGEMENT 

5.  After  complete  investigation  and  full  dis- 
cussion of  any  matter  under  consideration  by  the 
Works  Council,  the  Chairman  shall  call  for  a  vote 
which  shall  be  secret,  unless  otherwise  ordered 
by  the  Council.  The  Employee  Representatives 
and  the  Management  Representatives  shall  vote 
separately.  The  vote  of  a  majority  of  the  Em- 
ployee Representatives  shall  be  taken  as  the  vote 
of  all  and  recorded  as  their  unit  vote.  Similarly, 
the  vote  of  a  majority  of  the  Management  Repre- 
sentatives shall  be  taken  as  the  vote  of  all  and 
recorded  as  their  unit  vote. 

6.  Both  the  Employee  Representatives  and  the 
Management  Representatives  shall  have  the  right 
to  withdraw  temporarily  from  any  meeting  of  the 
Works  Council  for  private  discussion  of  any  matter 
under  consideration. 

7.  When  the  Works  Council  reaches  an  agree- 
ment on  any  matter,  its  recommendation  shall  be 
referred  to  the  Superintendent  for  execution, 
except  that  if  the  Superintendent  considers  it  of 
such  importance  as  to  require  the  attention  of  the 
general  officers,  he  shall  immediately  refer  it  to 
the  President  of  the  International  Harvester  Com- 
pany, who  may  either  approve  the  recommenda- 
tion of  the  Works  Council  and  order  its  immediate 
execution  by  the  Superintendent,  or  proceed  with 
further  consideration  of  the  matter  in  accordance 
with  Article  XIII. 

8.  In  case  of  a  tie  vote  in  the  Works  Council, 
it  shall  be  in  order  to  reopen  the  discussion,  to 

[  202  ] 


APPENDIX   I 

offer  a  substitute  or  compromise  recommendation, 
on  which  the  votes  shall  be  taken  in  the  same 
manner  as  above  provided. 

Article  XIII.    Reference  to  the  President 

1.  If,  after  further  consideration,  the  vote  in 
the  Works  Council  remains  a  tie,  then  the  matter 
shall,  at  the  request  of  either  the  Employee  Repre- 
sentatives or  the  Management  Representatives, 
be  referred  to  the  President  of  the  International 
Harvester  Company. 

2.  The  President,  or  his  specially  appointed 
representative,  may  confer  with  the  Works  Council 
as  a  whole,  or  any  sub-committee  thereof,  or  any 
group  of  Employee  Representatives,  at  such  time 
and  place  and  in  such  manner  as  in  his  opinion 
will  best  serve  to  bring  out  all  the  facts  of  the 
case. 

3.  Within  ten  days  after  the  matter  has  been 
referred  to  him,  the  President  shall  either 

(a)    propose  a  settlement  thereof;  or 

(6)    refer    the    matter    directly    to    a    General 

Council    to    be   formed    as    provided    in    Article 

XIV. 

4.  If  the  settlement  proposed  by  the  President 
is  not  satisfactory  to  a  majority  of  the  Employee 
Representatives,  and  if  after  a  further  period  of 
five  days  no  agreement  has  been  reached,  then  the 
President  may,  if  he  deems  it  advisable,  refer  the 
matter  to  a  General  Council  to  be  formed  as  pro- 
vided in  Article  XIV. 

[203] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

5.  If  the  President  decides  not  to  refer  the 
matter  to  a  General  Council,  or  if  the  vote  of  the 
General  Council  is  a  tie,  then  the  matter  may, 
by  mutual  agreement  of  the  President  and  a  ma- 
jority of  the  Employee  Representatives,  be  sub- 
mitted to  arbitration,  as  provided  in  Article  XV. 

Article  XIV.     General  Council 

1.  Whenever  in  the  opinion  of  the  President 
any  matter  coming  before  any  Works  Council 
affects  other  Works  of  the  Company,  or  whenever 
he  desires  to  refer  any  matter  as  provided  in 
Article  XIII,  he  may  call  a  General  Council  to 
consider  such  matter,  and  thereafter  the  Works 
Council  shall  take  no  further  action  thereon. 

2.  The  General  Council  shall  be  formed  in  the 
following  manner:  The  President  shall  issue  a 
notice  designating  the  several  Works  which  he 
deems  jointly  interested.  Thereupon  the  Em- 
ployee Representatives  in  the  Works  Council  at 
each  of  the  Works  designated  shall  select  two  or 
more  of  their  own  number  to  act  as  members  of 
the  General  Council.  There  shall  be  one  such 
member  of  the  General  Council  for  each  1,000  em- 
ployees or  major  fraction  thereof,  except  that  no 
Works  shall  have  less  than  two  Representatives 
in  the  General  Council. 

3.  The  Management  Representatives  in  the 
General  Council  shall  be  appointed  by  the  Presi- 
dent and  shall  not  exceed  the  number  of  Employee 
Representatives . 

[204] 


APPENDIX  I 

4.  The  President  or  some  person  designated  by 
him  shall  act  as  Chairman  of  the  General  Council, 
without  vote. 

5.  The  first  meeting  of  the  General  Council 
shall  be  held  within  ten  days  after  the  President's 
notice  calling  such  Council. 

6.  The  General  Council  shall,  when  necessary, 
take  recess  in  order  to  allow  Employee  Represent- 
atives therein  to  confer  with  other  members  of 
their  Work  Councils.  For  this  purpose  special 
meetings  of  the  Work  Councils  as  a  whole,  or  of 
the  Employee  Representatives  alone,  shall  (at 
the  request  of  the  Employee  Representatives 
serving  on  the  General  Council)  be  convened  at 
the  respective  Works  and  full  opportunity  shall 
be  given  for  conference  and  discussion  with  such 
Representatives  regarding  their  attitude  and  action 
on  the  pending  matter. 

7.  Reasonable  traveling  expenses,  including 
hotel  bills  of  Employee  and  Management  Repre- 
sentatives serving  on  a  General  Council,  shall  be 
paid  by  the  Company. 

8.  The  procedure  in  the  General  Council  with 
reference  to  the  consideration  of  matters  coming 
before  it  and  the  manner  of  voting  shall  be  the 
same  as  that  prescribed  for  the  Works  Council. 

9.  If  the  General  Council  is  unable  to  reach  an 
agreement  as  to  any  matter,  it  may,  by  mutual 
agreement  of  a  majority  of  both  the  Employee 
Representatives  and  the  Management  Represent- 
atives, be  submitted  to  arbitration. 

[205] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

Article  XV.    Arbitration 

1.  Whenever  the  President  and  a  majority  of 
the  Employee  Representatives  in  the  General 
Council,  or  the  Works  Council,  as  the  case  may 
be,  have  mutually  agreed  to  submit  a  matter  to 
arbitration,  they  shall  proceed  to  select  an  im- 
partial and  disinterested  arbitrator.  If  they  can- 
not agree  upon  an  arbitrator,  then  the  Employee 
Representatives  shall  choose  one  such  arbitrator 
and  the  President  shall  choose  another,  and  if 
these  two  agree,  their  decision  shall  be  final.  If 
they  do  not  agree,  then  they  shall  select  and  call 

•  in  a  third  arbitrator,  and  a  decision  of  a  majority 
of  these  three  shall  be  final. 

2.  The  arbitrator  or  arbitrators  shall  be  fur- 
nished all  the  information  and  testimony  they 
deem  necessary  regarding  the  matter  in  arbitration. 

Article  XVI.     Decisions  of  General  Council 
or  by  Arbitration 

All  decisions  of  any  General  Council  or  of  any 
arbitrator  or  arbitrators  shall  be  binding  upon 
all  the  Works  originally  designated  by  the  Presi- 
dent as  being  jointly  interested.  Any  such  de- 
cision may  be  made  retroactive. 

Article   XVII.     Guaranty   of   Independence 
of  Action 

Every  Representative  serving  on  any  Works  or 
General  Council  shall  be  wholly  free  in  the  per- 

[206] 


APPENDIX  1 

formance  of  his  duties  as  such,  and  shall  not  be 
discriminated  against  on  account  of  any  action 
taken  by  him  in  good  faith  in  his  representative 
capacity.  To  guarantee  to  each  Representative 
his  independence,  he  shall  have  the  right  to  appeal 
directly  to  the  President  for  relief  from  any  alleged 
discrimination  against  him,  and  if  the  decision 
of  the  President  is  not  satisfactory  to  him,  then 
to  have  the  question  settled  by  an  arbitrator 
selected  by  mutual  agreement. 

Article  XVIII.    No  Discrimination 

There  shall  be  no  discrimination  under  this  plan 
against  any  employee  because  of  race,  sex,  political 
or  religious  affiliation  or  membership  in  any  labor 
or  other  organization. 

Article  XIX.    Decisions  Affecting  Wages 

Decisions  affecting  wages  made  by  any  Works 
Council  or  General  Council  or  by  arbitration  shall 
be  subject  to  revision  whenever  changed  condi- 
tions justify,  but  not  oftener  than  at  intervals  of 
six  months. 

Article  XX.    Amendment  or  Termination 
of  Plan 

1.  This  plan  may  be  amended  by  the  Works 
Council  of  any  Works  by  a  majority  vote  of  all 
the  duly  elected  Employee  Representatives  to- 
gether with  a  majority  vote  of  all  the  Management 

[207  1 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

Representatives.  Amendments  must  be  proposed 
in  writing  at  a  regular  meeting,  and  no  vote  shall 
be  taken  thereon  until  the  regular  meeting  follow- 
ing such  presentation.  No  amendment  shall  be 
adopted  that  will  destroy  or  limit  the  equal  voting 
power  of  the  Employee  Representatives  and  Man- 
agement Representatives  in  the  Works  Council 
and  General  Council. 

2.  If  in  the  judgment  of  the  President  any  pro- 
posed amendment  affects  other  Works,  then  he 
shall  call  a  General  Council  to  consider  such 
amendment.  The  adoption  or  rejection  of  an 
amendment  shall  not  be  the  subject  of  arbitration. 

3.  This  plan  may  be  terminated  at  any  Works, 
after  six  months'  notice,  by  a  majority  vote  of  the 
employees  of  that  Works,  or  by  action  of  the 
Board  of  Directors  of  the  Company. 

Adoption  of  Plan 
This  plan  shall  become  effective  at  any  Works 
upon  adoption  by  a  majority  vote  of  the  employees 
of  such  Works  voting  thereon  at  a  special  election 
held  for  that  purpose. 


APPENDIX  II 

THE  WAGE  POLICY  OF  THE  ONEIDA  COMMUNITY,  LTD.1 

HHHE  Oneida  Community,  Ltd.,  has  for  many 
-*-  years  aimed  at  a  real  partnership  between  the 
owners,  the  management,  and  the  employees  of 
the  company,  and  along  somewhat  different  lines 
than  elsewhere.  We  have  never  adopted  any  of 
the  specific  "profit-sharing"  schemes  which  have 
become  so  common.  We  have  felt  that  much 
very  substantial  "sharing"  should  be  done  through 
the  medium  of  the  wages  before  the  more  ingenious 
and  doubtful  schemes  are  undertaken. 

While  we  have  never  believed  that  equality  of 
reward  was  either  practical  or  just  so  long  as 
equality  of  responsibility  was  unattainable,  we 
have  aimed  very  greatly  to  reduce  those  extreme 
inequalities  so  generally  regarded  as  natural  and 
inevitable,  in  order  that  a  minimum  wage  might 
be  paid  which  would  guarantee  comfort  and  happi- 
ness to  every  faithful  workman,  no  matter  how 
humble  his  talents.  We  have  aimed  to  increase 
this  minimum  wage  for  individuals  as  they  came 
to  contribute  to  the  prosperity  of  the  society,  and 
to  increase  the  minimum  to  all  as  fast  as  the 
Oneida  Community's  prosperity  increased. 

1  Quoted  from  a  booklet  issued  by  the  society. 
[209] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

A  brief  explanation  of  the  principles  underlying 
our  industrial  system  will  indicate  the  place  this 
"High  Cost  of  Living"1  plan  has  taken  in  our  in- 
dustrial developments. 

We  have  aimed  largely  through  the  medium  of 
wages — 

First,  to  share  whatever  prosperity  has  come  to 
the  company  with  every  one  connected  with  it. 
During  the  past  twenty  years  wages  have  been 
periodically  advanced,  not  as  a  result  of  demand 
from  the  employees  nor  as  a  result  of  competitive 
conditions,  but  because  in  each  case  our  prosperity 
had  reached  a  point  where  such  an  increase  in 
wages  was  due  as  a  division  of  profits. 

Second,  to  reduce,  as  far  as  possible,  special 
privileges.  We  re-examined  many  old  assumptions 
regarding  the  privileges  of  the  management  and 
the  office  classes  as  compared  with  factory  work- 
ers. We  have  given  attention  to  the  financial 
protection  of  employees  on  an  equal  basis  with 
the  protection  of  capital.  With  initiative  in- 
creasingly in  the  hands  of  the  employees,  homes 
and  home  surroundings,  recreational  facilities,  and 
schools  have  been  created  of  such  a  character  as 
to  satisfy  and  to  be  used  in  common  by  manage- 
ment and  men.  Our  system  of  employment  has 
long  recognized  that  every  workman  should  so 
far  as  possible  have  the  same  security  of  employ- 
ment as  the  executives  and  managers  of  a  business 
institution  provide  for  themselves. 

1  See  p.  108. 
[210  1 


APPENDIX  II 

Finally,  we  have  gone  very  carefully  into  the 
subject  of  protecting  standards  of  living.  As  an 
illustration,  we  recognize  that  a  rate  of  wages 
once  attained  will  set  the  standard  of  living  for  a 
family  so  completely  that  any  wage  reduction 
which  threatens  this  standard  of  living  is  not  only 
a  misfortune,  but  an  injustice.  Under  our  present 
theory  and  practice,  when  a  workman's  job  is 
changed  in  the  interest  of  the  company  we  aim, 
during  the  period  while  he  is  learning  his  new  job, 
to  keep  his  wages  as  nearly  as  possible  up  to  his 
previous  rate  in  order  that  he  may  maintain  his 
old  standard  of  living. 

It  was  in  connection  with  this  maintenance  of 
the  standard  of  living  that  the  violent  changes 
brought  about  by  the  war  were  discussed.  In 
ordinary  times  it  has  proved  possible  to  provide 
for  changes  in  cost  of  living  with  increasing 
efficiency  and  certainty  by  rule-of -thumb  methods 
— by  a  conscientious  recognition  in  wages  of 
changed  conditions.  The  close  human  touch 
always  maintained  between  the  management  and 
employees  of  the  Oneida  Community  has  given 
to  such  adjustments  a  very  practical  efficiency. 
The  war,  however,  introduced  such  tremendous 
factors  of  variation  and  uncertainty  that  some 
machinery  for  automatic  adjustment  had  to  be 
devised  or  our  progress  toward  the  much-desired 
"partnership"  would  be  interrupted  and  perhaps 
permanently  endangered. 

By  January,  1917,  the  advance  of  commodity 

[211] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

prices  had  already  greatly  reduced  the  purchasing 
power  of  a  dollar,  and  this  reduction  was  pro- 
ceeding so  fast  that  neither  well-meaning  em- 
ployers nor  importunate  employees  could  accom- 
plish wage  advances  large  enough  or  fast  enough 
to  prevent  a  steady  fall  of  real  wages  throughout 
the  country.  This  condition  promised  to  continue 
indefinitely,  for  no  manufacturer  dared,  and  it 
was  evident  that  no  one,  unless  forced  to  do  so, 
would  dare,  to  make  wage  advances  commensurate 
with  commodity  advances.  The  difficulty  of  ac- 
complishing wage  reductions  later  when  com- 
modities had  fallen  back  to  their  old  level  loomed 
with  sinister  suggestion  in  the  background. 

Yet  anything  short  of  equivalent  advances 
meant  that  labor  would  receive  smaller  returns 
throughout  a  period  when  the  profits  and  pros- 
perity of  manufacturers  promised  to  reach  boom 
proportions.  The  Oneida  Community,  Ltd.,  could 
not  endure  such  a  situation  without  going  back 
on  every  principle  of  its  organization.  For  our 
employees'  wages  must  fully  cover  the  increase  in 
the  cost  of  living.  Their  standard  of  living  must 
always  be  fully  protected. 


BIBLIOGRAPHY 

THE  NEW  THOUGHT  IN  MANAGEMENT 

An  Approach  to  Business  Problems.    A.   W.   Shaw. 

Chap.  VI.     Harvard  University  Press,  Cambridge, 

Massachusetts,  1916. 
Employment    Management.    Daniel    Bloomfield.      The 

H.  W.  Wilson  Company,  New  York,  1919. 
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Magazine  Company,  New  York,  1918. 
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McGraw-Hill  Book  Company,  New  York,  1912. 
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Underlying   Industrial   Reconstruction.     Hon.    W. 

L.  Mackenzie  King,  C.M.G.     Houghton  Mifflin 

Company,  Boston,  1918. 
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Mifflin  Company,  Boston,  1909. 
Management  and  Men.    Meyer  Bloomfield.    The  Cen- 
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Principles   of   Scientific   Management.     Frederick    W. 

Taylor.     Harper  &  Brothers,  New  York,  1917. 
Social  Psychology.     William  McDougall.     Holt,  New 

York,  1912. 
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Philadelphia,  1910. 
The  Executive  and  His  Control  of  Men.     E.  B.  Gowin. 

Macmillan,  1915. 

[21S1 


COMMON   SENSE  IN  LABOR  MANAGEMENT 

The  Library  of  Factory  Management,  Vol.  IV — Labor. 

A.  W.  Shaw  Company,  Chicago,  1915. 

The  New  Industrial  Day:  A  Book  for  Men  Who  Employ 
Men.  William  C.  Redfield.  The  Century  Com- 
pany, New  York,  1912. 

The  Instincts  in  Industry.  Ordway  Tead.  Houghton 
Mifflin  Company,  Boston,  1918. 

Works  Manager  of  To-day.  Sidney  Webb.  Longmans, 
1917. 

INDUSTRIAL   DEMOCRACY 

American  Company  Shop  Committee  Plans.    A  digest  of 
twenty  plans  for  employees'  representation,  com- 
piled by  the  Bureau  of  Industrial  Research,  New 
York,  1919. 
Hart,  Schaffner  &  Marx  Labor  Agreement.  Chicago,  1916. 
Man  to   Man:      The  Story  of  Industrial  Democracy. 
John  Leitch.     B.  C.  Forbes  Company,  New  York, 
1919. 
The  Colorado  Industrial  Plan.     John  D.  Rockefeller, 

Jr.     Standard  Oil  Company,  New  York,  1916. 
Works  Committees  and  Joint  Industrial  Councils.     A. 

B.  Wolfe.  The  Industrial  Relations  Division  of 
the  Emergency  Fleet  Corporation  of  the  United 
States  Shipping  Board,  January,  1919. 

WORKING   CONDITIONS 

Factory  Lighting.     C.  E.  Clewell.     McGraw-Hill  Book 

Company,  New  York,  1913. 
Fatigue  and  Efficiency:  A  Study  in  Industry.  Josephine 

Goldmark.     Charities  Publication  Committee  of 

the  Russell  Sage  Foundation,  New  York,  1912. 
Fatigue  Study.     Frank  B.   and  Lillian   M.   Gilbreth. 

Sturgis  &  Walton  Company,  New  York,  1916. 

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BIBLIOGRAPHY 

Industrial  Accidents  and  Their  Compensation.     Gilbert 

Lewis    Campbell.     Houghton    Mifflin    Company, 

Boston,  1911. 
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British  Munition  Workers'  Committee.     Bulletin  of 

the  United  States  Bureau  of  Labor  Statistics,  No. 

249.     Government   Printing  Office,   Washington, 

D.  C,  1919. 
Occupational  Diseases.     W.  Gilman  Thompson,  M.D. 

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Harper  &  Brothers,  New  York,  1913. 
Social  Engineering.      William  H.  Tolman.     McGraw 

Publishing  Company,  1909. 
The  Library  of  Factory  Management,  Vol.  I — Buildings 

and  Upkeep.  A.  W.  Shaw  Company,  Chicago,  1915. 
Universal  Safety  Standards.     Carl  M.  Hansen,  M.E. 

Universal  Safety  Standards  Publishing  Company, 

New  York,  1914. 
Work-Accidents  and  the  Law.     Crystal  Eastman.  Chari- 
ties Publication  Committee  of  the  Russell  Sage 

Foundation,  New  York,  1910. 

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The  Standard  of  Living  Among  the  Industrial  People  of 
America.  Frank  Hatch  Streightoff.  Houghton 
Mifflin  Company,  Boston,  1911. 

Report  of  the  United  States  Housing  Corporation.  United 
States  Department  of  Labor,  Bureau  of  Industrial 
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War-time  Housing  and  Community  Development.  Re- 
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Delaware.     John  Nolen,   Cambridge,   Massachu- 
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Welfare  and  Housing.     J.  E.  Hutton.     Longmans,  1918. 

THE   MONEY   INCENTIVE 

Economic  Studies,  published  for  the  American  Eco- 
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Efficiency  as  a  Basis  for  Operation  and  Wages.  Har- 
rington Emerson.  Engineering  Magazine  Com- 
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Henry  P.  Kendall.  Harper  &  Brothers,  New 
York  and  London,  1918. 

Profit-sharing  in  the  United  States.  Bulletin  of  the 
United  States  Bureau  of  Labor  Statistics,  No. 
208,  1917. 

Scientific  Office  Management.  William  H.  Leffingwell. 
A.  W.  Shaw  Company,  Chicago,  1917. 

THE   WORKER'S   SECURITY 

Philadelphia  Unemployment — With  Special  Reference 
to  the  Textile  Industries.  A  report  by  Joseph  H. 
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BIBLIOGRAPHY 

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WORKERS   AS   CRAFTSMEN 

The  Creative  Instinct  in  Industry.     Helen  Marot.     E. 
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Industrial  Democracy.      Sidney   and   Beatrice   Webb. 

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A.  J.  Portenar.    The  Macmillan  Company,  New 

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PERIODICALS 

Many  excellent  articles,  too  numerous  to  mention 
separately,  are  scattered  through  the  files  of  the 
following: 

Annals  of  the  American  Academy. 
Economic  Studies. 
Factory. 

Industrial  Management. 
Quarterly  Journal  of  Economics. 
System. 

The  National  Civic  Federation  Review. 
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[217] 


COMMON  SENSE  IN  LABOR  MANAGEMENT 

Various  bulletins  and  reports  of  the  United  States 
Bureau  of  Labor  Statistics.  For  a  very  complete 
list  of  periodicals,  see  The  Monthly  Labor  Review, 
June,  1919,  of  the  Bureau  of  Labor  Statistics, 
"List  of  Labor  Papers  and  Journals  and  Other 
Periodicals  Featuring  Labor  Matters  Received 
Currently  in  the  Department  of  Labor  Library." 


THE   END 


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